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Choosing Between a Business Credit Card and a Personal Credit Card

Business Credit Card vs. Personal Credit Card
Lauren Ward
Lauren WardUpdated July 6, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Business credit card vs. personal: which is better? Ultimately each small business owner may have a different answer. Personal credit cards typically come with more consumer protections, lower fees, and longer 0% APR introductory rates. Business credit cards, on the other hand, generally offer higher credit limits, bookkeeping benefits, and other business-related perks. Which type of card makes the most sense for you will depend on the size and stage of your business, as well as how you intend to use the card. Here’s everything you need to know about business vs. personal credit cards. 

What Are Personal Credit Cards Used for?

Personal credit cards are meant to be used by consumers for everyday expenses, such as groceries, restaurants, gas, entertainment, travel, and shopping. Personal credit cards also offer add-on benefits, such as cash back rewards and points/miles that accumulate as you spend. In addition, using a personal credit card and paying it off on time each month can also help you build your personal credit profile.You can use a personal credit card to pay for business expenses, but it’s important to keep track of your business purchases for tax purposes.

What Are Business Credit Cards Used for?

Business credit cards work the same way as personal credit cards, except they are specifically designed for business use. Small business owners and independent contractors can use a business credit card to pay for any business-related expense, including office supplies, inventory, and business travel. An advantage of a business credit card is that it will usually offer features, perks, and tools that are designed for business owners, such as free cards for employees (sometimes with spending limits), bookkeeping tools, and bonus miles/points for spending in business-related categories. Using a business credit card can also help you build your company’s credit profile.

Key Differences Between a Business and a Personal Credit Card

Weighing the pros and cons of a business credit card vs. a personal credit card may come down to the following variables for small business owners.

Credit Limits

One key difference between a personal and business credit card is the credit limit you can get with each. Business credit cards typically have higher credit limits than personal credit cards. This is because the card issuer considers both your income and the business’s revenue when determining the credit limit. Issuers also consider both the business’s and the business owner’s credit score. A higher limit could be useful if your business has steep operating costs, such as high inventory expenses each month.Recommended: Choosing Between a Business Line of Credit or a Business Credit Card 


Both personal and business credit cards offer cash back rewards and points or miles for spending – along with bonus rewards for spending in certain categories. Personal cards are more likely to offer bonus points/miles for consumer spending, such as purchasing groceries or clothing. Business cards, on the other hand, typically offer bonus rewards for business-related spending, such as phone bills, online advertising, or office supplies.

Bookkeeping Benefits

Unlike most personal credit cards, business credit cards will usually offer benefits that can help you better manage your company's finances, such as integration with your accounting software and year-end itemized spending reports. This can simplify things come tax time since you won’t have to sift through your personal card’s statements to find all your business expenses. Some business cards also allow you to tag expenses or attach a picture of the receipt to each expense.

Interest Rates

Business credit cards sometimes have higher annual percentage rates (APRs) than personal credit cards, which could mean paying more in interest on any balance you carry from month to month. However, if you pay off your card in full each month, you won’t be affected by the interest rate. While both personal and business cards will offer 0% APR introductory rates, these deals are  easier to come by with personal cards. When you do find a low or 0% promotional rate on a business card, the time period is typically shorter than you’d find for a personal card, and it likely only applies to purchases, not balance transfers. When business cards do offer a promotional rate on balance transfers, they often also charge a balance transfer fee.

Credit Reporting

Using a personal card affects your personal credit score. Card issuers will generally report your card activity monthly to the three major consumer credit bureaus: Experian, Equifax, and TransUnion. Even if you use your personal credit card for business use, it won't help you build credit for your business or impact your business credit score.Business card usage affects your business credit score. And, depending on the card issuer, your business credit card can affect your personal credit score too. Many issuers require you to secure your business card with a personal guarantee that you'll pay back any business debts you accrue. If so, they may report your business credit card activity to both the consumer and commercial credit bureaus, affecting both your personal and business credit scores.Recommended: Comparing Business and Personal Credit Scores 

Consumer Protection Rights

One key difference between a business credit card and a personal credit card relates to consumer protections. The 2009 Credit Card Act enabled a number of protections for personal credit cards, including:
  • Limitations on interest rate hikes
  • Prevention of double-cycle billing
  • Limitations on fees
These protections generally don’t apply to business credit cards. That means a business credit card’s APR could potentially change overnight and/or you could get hit with an exorbitant fee for a slightly late payment. While some business card issuers will extend consumer protections as a courtesy to small businesses, it’s not required by law. If you opt for a business card, be sure to read your credit card agreement carefully to make sure you understand all the terms and potential fees.

Business Credit Card vs. Personal Credit Card: Which Is Right for You?

Both business and personal credit cards function, earn rewards, and accrue interest in the same way. And, annual fees (if charged) for both types of cards may be tax-deductible if the card is used for your business. If you’re a freelancer, run a very small business, or simply have a side hustle, you may be fine using a personal card as your “business card.” However, if you have employees, are planning to grow your business, or may need access to a higher business line of credit or small business loan in the future, you will likely be better off with a business credit card. The best business credit cards offer borrowers business-specific rewards and perks. Business cards also give you the ability to build business credit, and avoid the possible bookkeeping, tax, and legal problems that can be associated with mixing your personal and business finances.Recommended: No Doc Business Line of Credit: What It Is and Where to Get One

Finding the Right Credit Card

If you have an immediate cash need and are having trouble getting approved for a business credit card, it may make sense to start with a personal credit card, while also opening a secured credit card in your business’s name. Secured credit cards require a down payment, and the amount of the down payment becomes your credit limit. After you establish a history of on-time payments, you may be able to upgrade to an unsecured credit card with a higher credit limit.   

The Takeaway

Personal credit cards are meant to be used by individual consumers for everyday purchases, such as household items and groceries. Business credit cards are meant to be used by businesses for business-related expenses. Business credit cards typically come with a variety of perks aimed specifically at business owners. They also usually have higher credit limits than personal credit cards. On the downside, they don’t necessarily come with consumer protections, are less likely to offer generous introductory rate offers, and might have higher rates and fees.To find the right card for your business needs, consider how you plan to use the card, how much you regularly spend on business expenses, and which perks could be beneficial. Also look at the fees and terms of each potential card, including the annual fee (if any), other potential fees, and the APR. With Lantern by SoFi’s online marketplace, you can shop different types of cards (including credit-building cards) and compare multiple credit card offers all in one place without making any commitment.

Frequently Asked Questions

Can I use a personal credit card for business?
How do you get a business credit card?
Can I put personal expenses on a business credit card?
Will a business credit card affect my personal credit?
Photo credit: iStock/bernie_photo

About the Author

Lauren Ward

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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