Credit cards have become an integral part of our lives. Credit cards allow you to spend a certain amount of money for a certain period of time, without borrowing from anyone else. But many people are always confused about whether business credit cards or personal credit cards are better. Let’s see what are the differences and advantages of both types of cards.

What is a business credit card?

A business credit card is a credit card designed specifically for businesses. These cards work by using a revolving line of credit that is provided to your business. Business credit cards have features that suit business needs, such as expense tracking, card restrictions, and high credit limits.

What is a personal credit card?

As the name suggests, a personal credit card is a personal card issued in the name of an individual. It can be used for any personal expenses. Personal credit cards have benefits such as reward programs and cashback options.

What are the main differences between a business credit card and a personal credit card?

1.⁠ ⁠Liability

In a personal credit card, the person is liable for any debt incurred on the card. However, in a business credit card, the liability is not on the individual, but on the business as a legal entity. This means that the credit history of business cards is not affected by the credit score or CIBIL of the individual.

2.⁠ ⁠Credit Reporting

Only personal credit cards are reported on an individual’s personal credit report. So if you use a personal credit card for business purposes and make a late payment, it will negatively affect your personal credit score.

3.⁠ ⁠Reward Categories

Business credit cards and personal credit cards often offer rewards in different categories. Business cards offer more rewards for business expenses such as office supplies, travel expenses, and telecommunications. However, personal credit cards offer rewards for dining, entertainment, and groceries.

4.⁠ ⁠Credit Limit

Business credit cards typically have higher credit limits than personal credit cards. The higher credit limits are because business expenses are likely to be larger than personal expenses.

5.⁠ ⁠Reporting and Statements

Business credit cards provide detailed reporting and statements that help you track expenses and reconcile accounts, while personal credit cards may not provide as much detailed information.