Business vs personal credit cards

What is a business credit card?

Whilst you can still use your personal credit card for business related transactions you may find that over time, as your business grows, it will be easier to manage your personal and business purchases separately.

Both can be used to purchase goods and services. However, a business credit card generally has more features than a traditional credit card which enables the business to apply spending controls.

What are the main differences and features of a business credit card?

  • Spending restrictions for transactions, cash advances and types of purchases can be applied for any additional cardholders.
  • Expense management reports can be provided for the card. This normally entails and itemised list of purchases and can be a useful tool to track daily business expenses.
  • Tax deductions on spending and higher credit limits.
  • If the card is used for a business structure other than an individual or sole trader, the debts incurred remain the company's liability and not the individual's.
  • Fraudulent misuses of cards are usually protected under company liability insurance. Some cards also have built-in cardholder transit accident insurance which covers the cardholder, their spouse and dependent children in the case of an accident while on a business related journey.
  • Special business rewards which can be redeemed for business related travel and merchandise.
  • Additional account services to support your business' needs.

Reasons to use them

  • Manage your business and personal expenses separately. In effect this will reduce time spent reconciling accounts.
  • Reduces the amount of petty cash normally required and employees will not need to pay out of their own pockets for business related purchases.
  • Purchases can be easily conducted over the internet which reduces the time spent travelling to a shop front to make and sign for purchases.
  • Higher credit limits
  • Restrictions on spending

The majority of banks and financial institutions offer business credit cards for small to large companies. Before you apply for a business credit card it's important to shop around to ensure you are getting a good deal and a product that has all the features you require. Look for a card with a low interest rate, but that doesn't exclude all the features you need to make it cost effective for your business.

There are two kinds of business credit cards commonly used in Australia: charge cards and credit cards.

Compare business and personal credit cards using RateCity's credit card comparison tool.

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