When considering financing for your small business, you may be unsure about the benefits of using a business credit card over a personal one. Research by the U.S. Small Business Administration shows that almost twice as many small business owners opt for a personal credit card over a business one. 
Business credit cards often involve a much higher fee which may be off-putting to those on a budget but when used carefully, you can reap the rewards. Let’s take a look at the differences between business and personal credit cards so that you can make the right decision for your small business. 

Purchasing Power 

Business expenses tend to be significantly larger than personal ones, so it makes sense that business credit cards generally have higher limits to accommodate for this. This is very useful for emergencies and smoothing over bumps in your cash flow pattern, but it is still important to borrow responsibly. You shouldn’t overspend in the hopes that doing so will generate income, as this could lead you into debt. 

Business Credit History 

Many people don’t realise that business and personal credit profiles are separate entities. A personal credit card won’t help you to build a business credit history, even if you use it to cover business expenses. This is because business credit card issuers send data to credit agencies such as Equifax Small Business, Experian Business or Dun & Bradstreet. Therefore, using a business credit card over time can help you to build a solid profile and score. 

Protect Your Personal Credit 

A high balance on a personal credit card can have a negative impact on your score. Since business costs tend to be greater than personal ones, using a personal card for business expenses could really do some damage. A business credit card with a higher limit can stop your personal score from taking a hit. Business credit cards also don’t report activity to personal credit bureaus, unless the account is paid late. Therefore, a business credit card is a good way of protecting your personal finances. 

Separate Records 

Mixing business and personal bank accounts is one of the top money mistakes made by small business owners. Using a business credit card automatically creates a separate log of transactions so that you don’t have to pour over your statements trying to remember which transactions were business-related later on. This also makes you a much more attractive candidate to investors and lenders, who don’t look favorably upon muddled records. 


Many business credit cards offer lucrative rewards tailored to the needs of small business owners. This means that strategic use of your business card could see you reap many air miles, points and cash backs that can save you some serious money. These cards often have attractive welcome bonuses, too. Use your card carefully and you could easily offset the annual fee! 

Additional Features 

Business credit cards often offer helpful features that are designed around business owners’ needs, such as: 
Employee cards, often for free 
Business travel perks 
Cash back or bonus miles for business costs 
Year-end summaries 
Vendor payment services 
When selecting a business credit card, it’s important to bear these features in mind and decide which will benefit you the most. 


There are many benefits to using a business credit card over a personal one. Not only do business credit cards offer more lucrative rewards and help you to build business credit, they can also help to keep your finances organised. A business credit card is also enormously useful to smooth over cash flow problems, whereas your personal credit limit may not allow this. Finally, using a business credit card shows that you are taking your company seriously, not just “dabbling.” 
If you have any questions on this, please get in touch
Written by: 
Nicola J Sorrell - Effective Accounting 
Founder | Xero Champion | IR35 Expert 
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