What’s the Difference Between a Business Credit Card and Corporate Credit Card?

Thinking about applying for a new credit card as a small business owner? If so, you may be wondering whether to choose a small business credit card or a corporate credit card. Check out our guide to learn a few key differences between the two.

Small business credit cards are intended for covering expenses associated with running a small business. As with a personal credit card, a small business credit card gives the primary cardholder a line of credit, allowing them to have greater cash flow and purchasing power, elements that are crucial to navigating startup costs.

Many small business owners opt to open this type of credit card in order to simplify finances, gain legal protections, and earn rewards.

A corporate credit card is a credit card that is set up on behalf of a business rather than an individual business owner. These cards can be issued out to business owners and their employees to pay for business expenses. Most corporate credit cards are used by companies with a high annual revenue (about $4 million or more).

This type of credit card helps large companies streamline the process of reporting and tracking expenses and makes it easier for employees to make purchases.

Thinking about setting up a small business credit card? If so, you’ll enjoy many benefits that streamline day-to-day operations—but there are some downsides to be aware of too.

Check out these pros and cons before applying:

• Available to any business or sole proprietor
• Loose eligibility requirements
• Lower fees (in comparison to corporate cards)
• Higher rewards (in comparison to corporate cards)
• Primary cardholders can earn rewards

• Primary cardholder is liable for debt
• Credit card activity affects primary cardholder’s credit score
• Employees cannot earn rewards

As with any credit card, corporate cards come with a range of pros and cons. Here are some of the points to consider when choosing the right credit card for your business needs:

• No single business owner or employee is held liable
• Streamlines the reporting and tracking of expenses
• Easier way to manage employee spending (can set limits)
• Companies can earn rewards

• Higher fees (in comparison to small businesses cards)
• Lower rewards (in comparison to small businesses cards)
• Strict requirements
• Employees typically can’t earn their own rewards

Small business credit cards and corporate credit cards vary in a few categories, such as liability, eligibility requirements, and usage. Corporate credit cards are usually only available to larger companies with a large number of employees, annual revenue, and a high transaction volume. Small business credit cards are open to any sized business. However, it’s important to note that small business credit cards hold the primary cardholder responsible for debt and fees.

Would you like to learn more about business credit cards? Read our article on the Best Instant Approval Credit Cards 2021.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.