Personal Credit Cards and Business Credit Cards are similar, but also vary in a number of important ways. Let’s examine some of the important differences of personal credit cards vs. business credit cards.
Personal Credit Cards and Credit Reporting
With a personal credit card, your credit card activity is generally reported monthly to the three major consumer credit bureaus – Equifax®, Experian® and Transunion®. Each of these credit bureaus compile your credit report. A credit report is used to show your creditworthiness to lenders and other agencies that require a credit check. It determines your interest rate and your credit rating.
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They do not compile one giant credit report; instead three separate credit reports from each bureau are generated. They don’t all collect the same information from lenders and collection agencies; instead, the lenders and collection agencies get to pick and choose the companies they will report information to. You can get all three credit reports from annualcreditreport.com.
But with a business credit cards, that doesn’t always happen. If you’re counting on a business credit card to boost your personal credit scores, you’ll want to make sure you’re using one that reports to both personal and business credit bureaus.
Personal Credit Card Credit Limits
Business credit cards often come with more spending power than personal credit cards.
That’s because limits can be based on both personal income and business revenue, among other factors like creditworthiness.
Revenue that’s bigger than your income could result in a higher limit than you’d get on a personal card, where you’re reporting only personal income to which you have a reasonable expectation of access.
Introductory Interest Rate Offers
On personal credit cards, introductory 0% APR periods are offered frequently — often lasting 12 months or longer.
While some business credit cards offer introductory 0% APR terms, they tend to shorter, and often just apply to purchases, not balance transfers.
Both types of cards earn rewards and accrue interest in the same way. Annual fees on both types of cards can be tax-deductible if they’re used for business expenses.
