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

Small business credit cards and corporate credit cards are similar—however, with a small business card, the cardholder is responsible for fees and debts, and with a corporate card, the company is liable.

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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.

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What is a small business credit card?

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.

What is a corporate credit card?

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.

How do they differ?

The main difference between a small business credit card and a corporate credit card is liability: personal liability for small business cards and corporate liability for corporate cards.

When it comes to small business credit cards, the primary cardholder (usually the business owner) is responsible for paying off debts and fees. Consequently, the credit card activity of a small business card will be reflected in the business owner’s personal credit score.

A corporate credit card holds the company liable for those same debts and fees. Some companies choose to disperse liability across all authorized cardholders, requiring employees to submit expense reports before reimbursement.

Corporate credit cards and small business credit cards have different eligibility requirements.

Most corporate credit cards are reserved for larger companies and designed to be issued to at least 15 authorized cardholders (CEOs, managers, employees, etc.).

Companies can use small business cards regardless of size, annual revenue, or number of cardholders, which makes them appealing to small business owners and sole proprietors.

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Pros and cons of small business credit cards

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:

Pros

  • 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

Cons

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

Pros and cons of corporate credit cards

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:

Pros

  • 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

Cons

  • 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

Business credit card vs. corporate credit card FAQ

What’s the difference between a business credit card and a corporate credit card?

With a corporate credit card, the company is liable for any accrued debts or fees, whereas with a small business credit card, the primary cardholder is held responsible. Likewise, the company earns rewards from a corporate credit card, while the primary cardholder earns rewards from a small business credit card.

What is a corporate business credit card?

A corporate business credit card is similar to a personal credit card, except that the account is set up in the company’s name. This means the company is held responsible for any debts and fees, and also gains all rewards associated with the card.

Is a corporate card a credit card?

Yes, a corporate card is a type of credit card. These cards are typically issued out to employees for making business purchases. However, rather than being established in the name of the employee, the card is set up in the name of the company.

How do I qualify for a business credit card?

You must own an established business in order to qualify for a business credit card. You’ll likely need to provide your employer identification number, social security number, and other business information in order to apply.

Who is responsible for a corporate credit card?

Though an employee may be granted permission to make purchases with a corporate credit card, the company is ultimately liable for any debts or fees associated with the account.

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The takeaway

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.

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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.

Brooke Kunz
Written by
Brooke Kunz
Brooke is a copywriter and artisan ice cream enthusiast dwelling in California's sunny Central Valley. She's happiest when hiking in the backcountry, baking an overly complex cake recipe, or reading an engrossing new memoir.
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