| Business or Personal Credit Card |
| By Credit Federal |
Published
10/26/2007
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Business Credit Card
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Small Business VS Personal Credit Card
Some small business owners continue using their personal credit card instead of getting a business credit card. While both offer unsecured credit lines, getting a business credit card has its advantages.
Personal credit cards and small business credit cards are much more different than just their names, namely a business card provides a more detailed expense register of purchases and can be much more helpful in tracking expenses and itemizing deductions.
Most small business credit cards provide quarterly and annual reports that itemize spending by merchant, product and tax categories. Typically they also specify which employee; or fellow card holder added to the account, transacted specific purchases.
If you are starting out, or if you have no financial history with the bank issuing your card, you may need to offer a personal guarantee when applying. The applicant's credit history; instead of that of the business, most often determines the amount of credit card's credit limit as well as interest rate.
When choosing any credit card, compare the annual percentage rates, annual fees, and rewards programs. Rates on small business credit cards for those with the highest credit scores average about 14%, compared with 12% on consumer cards. Credit limits for business credit cards average about $50,000, compared with only $15,000 for personal credit cards.
If you expect to carry a balance, finding a low annual percentage rate (APR) is vital unless you'll pay off the balance in full each month before interest charges apply. Also consider rewards programs that offer discounts, cash back, or other perks.
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