Business cards vs. personal cards: Key differences
Editor's Note
There are a lot of misconceptions out there about the differences between business credit cards and personal credit cards. How different are they? Who can apply for a business card? And what are the pros and cons of each?
Let's go over the main differences between personal and business credit cards and show you how you can benefit from — and maximize — both card types.
Business vs. personal cards: Target audience
The first key difference is that business credit cards (naturally) are designed for business use. Meanwhile, anyone can use personal credit cards.
You may assume that you don't qualify for a business card. However, even if you don't have a formal business with a tax ID number, you can still open a business credit card.
Do you regularly sell products on eBay or Amazon? Are you a freelancer? Do you work as an independent contractor? In any of these cases, you might prefer to separate your business expenses from other purchases.
Even without an employer identification number, you can apply for a business credit card as a sole proprietor and use your Social Security number. Card issuers such as Chase even encourage you to do so with some cards.
Just remember that any card issuer can ask for additional information about your business. Citi, in particular, tends to place increased scrutiny on its business card applications.
Don't sweat it, though; if you have a good reason for applying, you shouldn't encounter any extra difficulty getting approved.
Business vs. personal cards: Applications and welcome bonuses
As a general rule, you usually can't earn a welcome bonus from the same card more than once in your lifetime. If you earn a welcome offer for The Platinum Card® from American Express, for example, you almost definitely won't be able to earn it again down the line.
However, business cards are treated as separate products in the same card family, so you can earn a welcome offer on both the personal and business versions of a card — the Amex Platinum and The Business Platinum Card® from American Express, for example.
There are also differing rules when it comes to application windows. The general rule of thumb with Citi applications, for example, is that you must wait at least eight days between applications for personal cards, and you can't apply for more than two cards in a 65-day period.
However, business cards follow different rules, so you can only apply for one Citi business card every 95 days.
It's important to keep these differences in mind when applying, especially since you'll want to maximize the one welcome bonus you do get on a given card. But fear not: If you already have the personal version of a card, you'll still be able to land the business version, along with its welcome offer.
Related: The best credit card welcome bonuses
Business vs. personal cards: Effect on credit score
A business card application will count as a hard inquiry on your personal credit report, but the card activity shouldn't show up on the same report.
This is important because if you're starting a business and run up a large balance on the card, it means that it won't lower your overall credit score by raising your credit utilization (a key factor used to determine your FICO score).
That said, if you default on a business card, an issuer can come after you. Therefore, you'll want to keep up with payments on a business card just as you would a personal card and avoid taking on too much debt.
Business vs. personal cards: Benefits and earnings rates
One of the easiest ways to maximize your points and miles is by using credit card category bonuses. Business credit cards tend to have different categories than their personal counterparts.
These earnings rates are typically more geared to, as you might guess, business expenditures. This includes bonus earnings on office supplies, shipping and transit, unusually large purchases and more.
There are even specialized business cards that can earn rewards on purchases made on a particular product or service.
In addition to different bonus categories, business cards offer unique perks that apply to businesses but may also be valuable to individuals.
For example, the Amex Business Platinum offers annual statement credits with Dell (up to $150 in statement credits on U.S. purchases made directly with Dell and an additional $1,000 statement credit after spending $5,000 or more per calendar year) and Adobe ($250 adobe statement credit after spending $600 or more on U.S. purchases made directly at Adobe per calendar year; subject to auto-renewal) — Enrollment is required for select benefits.
Business credit cards typically are not monitored or regulated as closely as personal credit cards. As a result, issuers provide fewer protections and can charge higher interest rates than for comparable personal products.
These companies can change your annual percentage rate or tack on additional fees and penalties without warning.
If you follow TPG's 10 commandments for travel rewards credit cards and never carry a balance on your card, the relative lack of protections shouldn't be much of a concern. Still, it's something to keep in mind.
Related: How many business credit cards should you have?
Bottom line
Business credit cards can help various businesses — large and small — maximize purchases by offering bonus points and miles in relevant categories. You can also access additional perks and welcome bonuses, helping to pad your loyalty accounts.
Is it time to add a business credit card to your wallet? If so, check out our list of the best business credit cards available right now.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
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- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
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- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.