Which Is More Useful - A Personal or Business Credit Card?

There are some key differences between the two types to consider. Business credit cards will affect both personal and business credit profiles. The lines between the two tend to blur. You will likely be required to sign a personal guarantee for any small business cards.

This means that if your business misses any payments, then you will still be liable to make them personally. 

A number of issuers will consider your personal credit score heavily in determining whether to extend credit to your business and how much to give you. They will report it to your business credit profile, but this may also spill over to your personal credit report. 

American Express and Capital One proactively report this business credit activity to both business and consumer credit bureaus. Chase and others only report to the commercial credit bureaus but will make a special report to consumer ones if you fall behind on your payments.   

One distinct advantage to business credit cards is that the credit limits tend to be higher. This is helpful if you actively are making expensive purchases. A higher limit will make it easier to keep that all important credit utilization ratio down, especially if you are making larger purchases every month. 

There are also different rewards with business credit cards. These bonuses often apply to WiFi costs, phone bills, or office supplies. This will be less helpful to sole proprietors who use these items more sparingly. In many cases, you are better off with a standard rewards program which permits you to gain bonuses for all purchases, or with just getting a personal credit card and its accompanying rewards program. 

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