Business Credit Cards vs Personal Credit Cards – Difference

Business Credit Cards vs Personal Credit Cards – Difference

Today we shall be discussing the difference between the Business credit cards vs Personal credit cards. Business credit cards are designed to suit the financial needs of different types of companies, ranging from small startups to major corporations. These cards allow you to keep your business and personal expenses separate, assign cards to employees, manage your cash flow, track your finances and earn rewards. Learn how business and personal credit cards can separately suit you in a more beneficial way, and how to find some Low rate business credit cards, find below.

Just as with personal credit cards, there is a variety of factors to consider before deciding if a business card is right for you. You can use this guide to learn more about business credit cards and how to compare them so that you can find an option that suits the needs and objectives of your business.

Business credit cards vs Personal credit cards

Unlike personal credit cards, business credit cards are created particularly for business spending and often include features such as additional cards for employees, customizable spending limits for different users and expense tracking. Some business credit cards may even have analytics tools designed to help with business reporting and budgeting.

Business Credit Cards vs Personal Credit Cards - Difference - 01

But in maximum other ways, business credit cards are similar to personal credit cards. With either option, you’ll get access to funds up to a specified limit and be able to pay off what you spend over time (with interest charges). Both personal and business credit cards also include costs in the form of annual fees and interest rates, as well as perks such as rewards programmes or complimentary insurance.

Who is responsible for the credit card?

With business credit cards, it is the business entity that is responsible for managing the account. If there is an issue with the account, the entire business will be held responsible, rather than one individual person that’s linked to the account. Moreover, rates and credit limits can be based on the turnover and credit background of the company, rather than the individual.

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Types of business credit cards:-

Whether you’re looking to keep credit card costs low, want to earn rewards points as you spend or want to take advantage of interest-free days, there are business credit cards on the market to suit many different purposes:->>>

  • Rewards business credit cards

    These cards reward you for paying with a credit card, usually offering a reward or frequent flyer points for every £1 spent on eligible purchases. Unlike personal credit cards, a business credit card with rewards will let you earn points on your work spending. It’s important to remember that these cards usually come with higher annual fees and interest rates, so you’ll need to make sure that the value of the rewards will outweigh any costs.

  • Frequent flyer business credit cards

    This type of rewards business credit card is linked to an existing frequent flyer programme, such as Virgin’s Flying Club. Some business frequent flyer credit cards are tied to a specific airline, while others allow you to get points that can be redeemed at a number of airlines. This kind of business credit card can be particularly lucrative for companies that do a lot of traveling.

  • Low rate business credit cards

    These business credit cards have low standard variable interest rates for purchases and can give companies a more affordable option if they need to pay off spending over a longer period of time. Some options even offer the same standard interest rate for purchases, cash advances, and balance transfers.

Many low rate business credit cards also have a low annual fee, which makes them popular for small businesses that need a cost-effective way to finance major expenses as they arise. They can also suit businesses that want a credit card on hand for any unexpected costs, or have seasonal and variable amounts of revenue.

  • Low fee business credit cards

    Similar to low rate options, low fee business credit cards are designed for companies and sole traders that want affordable access to a line of credit. These cards generally have annual fees around £30, or may even offer no annual fee if certain requirements are met. Frequently, banks will waive the fee for the first year and only apply it on the first anniversary of the account’s opening.

  • Business credit cards with interest-free days

    These credit cards offer businesses a competitive interest-free period for making purchases. A range of business credit cards offers an interest-free period (usually around 55 days) if you pay your balance in full by the statement due date. Depending on the card, they may include other features such as rewards, low fees or complimentary insurance.

Other business cards with interest-free days may actually be classified as business charge cards, with no interest rate or pre-set spending limit, but a requirement to pay off the entire balance by the statement due date. Both of these types of interest-free options are suited to businesses looking for a short-term cash flow solution.

  • Corporate business credit cards

    These credit cards are designed for larger businesses that want one account for business expenses. Corporate business credit cards may provide up to 99 supplementary cards (or more in some cases) and offer pre-set spending limits for each additional cardholder.

What is Business Charge Cards?

A Business Charge Cards acts as a short-term (usually monthly) loan to a business for any purchases charged on the card. These cards defer payment until the end of the statement period when you’re required to pay off the account in full. Interest rates do not apply to charge cards as there is no revolving line of credit, but they often apply hefty late fees if you don’t pay the balance in full by the due date.

Business charge cards are designed for organizations that have the financial stability to clear their balance each billing cycle, which will typically be between 25 and 51 days. If you are looking to borrow funds over a longer period of time, business credit cards may offer more flexibility.

Despite these different account structures, charge cards do have many similar features to conventional credit cards, including expense tracking tools, supplementary cards, rewards programmes, and complimentary extras. As a result, they are often put in the same category as business credit cards.

Conclusion:-

I hope after reading the above article you must have cleared all your doubts about what is the difference between Business credit cards vs Personal credit cards, Types of business credit cards, Low rate business credit cards, What is Business Charge Card? But if you still have any questions or doubts regarding this, you can always ask us here in the comments section below.

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