Business credit cards are designed to support the expenses of a company, not an individual. Here is a breakdown of some of the differences between the two:
Purpose:
Personal Credit Card: Meant for individual use, covering personal expenses, and managing personal finances.
Business Credit Card: Designed for businesses, used for business-related expenses, managing cash flow, and separating business and personal finances.
Liability:
Personal Credit Card: The individual cardholder holds sole liability for repaying debts incurred.
Business Credit Card: Businesses usually assume liability, though some may require a personal guarantee from the owner.
Credit Limit:
Personal Credit Card: Determined based on personal creditworthiness, income, and financial factors.
Business Credit Card: Usually based on the business's revenue, and creditworthiness, and may consider the owner's personal credit history.
Rewards and Benefits:
Personal Credit Card: Offers rewards and perks aligned with individual spending habits and lifestyle.
Business Credit Card: Provides rewards tailored to business expenses, like office supplies or travel.
Reporting and Accounting:
Personal Credit Card: Transactions build an individual's personal credit history.
Business Credit Card: Transactions contribute to a distinct business credit profile.
Use of Funds:
Personal Credit Card: Used for personal expenses like groceries, dining, and personal purchases.
Business Credit Card: Intended for business-related expenses such as office supplies, travel, and operational costs.