Business credit cards vs personal cards

What's the difference between a personal and a business credit card? And with which can you get a better deal?

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You’re a small business owner and your operation is growing. At this time, you might be wondering whether you should stick with your personal credit card or get a business card.

The answer is that as your business grows, a business credit card will usually become more and more necessary to fulfil some specific needs. But there are a few downsides to be aware of.

Compare business credit and charge cards

Table: sorted by interest rate on purchases.
Updated February 18th, 2020
Name Product Purchases Annual/monthly fees Rewards earn rate Rep. APR Incentive Representative example
British Airways American Express Accelerating Business Card
22.9%
£210 per annum
1.5 points per £1 spent
81.6% (variable)
Earn 1.5 On Business Points for every £1 spent with BA on eligible flights and 1.5 Avios for every eligible £1 spent on credit card. Earn an extra 3,000 On Business Points annually when £20K or more spent by card anniversary.
Representative example: When you spend £1,200 at a purchase rate of 22.9% (variable) p.a. with a fee of £210 per annum, your representative rate is 81.6% APR (variable).
Capital on Tap Business Credit Card
39.9
£0
N/A
39.9% (variable)
Upgrade to Capital on Tap Business Rewards Card for £99 pa to earn 1 point for every £1 spent. 1 point can be redeemed for either 1 Avios or 1p in cashback. 10,000 bonus points when £5,000 spent in first 3 months. Up to 20 free supplementary cards available.
Representative example: When you spend £1,200 at a purchase rate of 39.9% (variable) p.a., your representative rate is 39.9% APR (variable).
Capital on Tap Business Rewards Card
39.9%
£99 p.a.
1 point per £1 spent
39.9% (variable)
Earn 1 point for every £1 spent. 1 points can be redeemed for either 1 Avios or 1p in cashback. 10,000 bonus points when £5,000 spent in first 3 months. Up to 20 free supplementary cards available.
Representative example: When you spend £1,200 at a purchase rate of 39.9% (variable) p.a., your representative rate is 39.9% APR (variable).
American Express Gold Business Card
N/A (this product is a charge card).
£125 (£0 in first year)
1 point per £1 spent
N/A (this product is a charge card).
Earn 20,000 bonus Membership Rewards® points when you spend £3,000 in first 3 months of Card membership. Earn 1 Membership Rewards® point for every £1 spent thereafter.
American Express Platinum Business Card
N/A (this product is a charge card).
£595 p.a.
1 point per £1 spent
N/A (this product is a charge card).
Earn 40,000 bonus Membership Rewards® points when you spend £6,000 in first 3 months of Card membership. Earn 1 Membership Rewards® point for every £1 spent thereafter.
Barclaycard Business Flex Credit Card Mastercard
0% for 3 months reverting to 24.9%
£0
N/A
24.9% (variable)
Business Rewards - giving a range of discounts and rebates (up to 66% off AA membership, save 20% on B2B marketing sites and access to 99 UK business credit reports for £75, 5% Avis rebate, 15% off Ryman's stationary, up to 15% off with APH, £60 driving credit and first year membership free with Zipcar, first year of FSB registration free, 20% off bPay by Barclaycard device, up to 15% off ecommerce website with cloudBuy, 5% rebate on online advertising spend with Bing, 10% off selected hotel reservations for business trips with booking.com, 4% rebate at over 5,000 hotels and 10,000 restaurants and 1% rebate at petrol stations at selected locations with the USA and Canada with Mastercard, 3% off business flights with flybmi and 25% off first £200 spend at Amazon Business).
Representative example: When you spend £1,200 at a purchase rate of 24.9% (variable) p.a., your representative rate is 24.9% APR (variable).
Toolstation Trade Card Mastercard
0% for 3 months reverting to 24.9%
£0
N/A
24.9% (variable)
Apply for a card and spend on it between 11.11.19 and 31.3.20 and receive one prize draw entry to win 1 of 3 van wraps, maximum 10 entries.
Representative example: When you spend £1,200 at a purchase rate of 24.9% (variable) p.a., your representative rate is 24.9% APR (variable).
Travis Perkins Trade Credit Card Mastercard
0% for 3 months reverting to 24.9%
£0
N/A
24.9% (variable)
0% for 60 days on purchases made at Travis Perkins and participating group companies.
Representative example: When you spend £1,200 at a purchase rate of 24.9% (variable) p.a., your representative rate is 24.9% APR (variable).
Barclaycard Business Premium Plus Credit Card Mastercard
0% for 6 months reverting to 14.9%
£100 per annum
N/A
36.2% (variable)
0.5% after £1 of yearly spend. Maximum of £400 cashback paid per year. Cashback paid Anniversary into Card Account. If less than £10 Cashback earned in any Cashback Year, it will not be credited to the account and will not be carried forward to the following year.
Representative example: When you spend £1,200 at a purchase rate of 14.9% (variable) p.a. with a fee of £100 per annum, your representative rate is 36.2% APR (variable).
Barclaycard Business Select Credit Card Mastercard
0% for 6 months reverting to 19.9%
Year 1 - £0, Year 2 onwards - £32 per annum
N/A
26.4% (variable)
Business Rewards - giving a range of discounts and rebates (up to 66% off AA membership, save 20% on B2B marketing sites and access to 99 UK business credit reports for £75, 5% Avis rebate, 15% off Ryman's stationary, up to 15% off with APH, £60 driving credit and first year membership free with Zipcar, first year of FSB registration free, 20% off bPay by Barclaycard device, up to 15% off ecommerce website with cloudBuy, 5% rebate on online advertising spend with Bing, 10% off selected hotel reservations for business trips with booking.com, 4% rebate at over 5,000 hotels and 10,000 restaurants and 1% rebate at petrol stations at selected locations with the USA and Canada with Mastercard, 3% off business flights with flybmi and 25% off first £200 spend at Amazon Business).
Representative example: When you spend £1,200 at a purchase rate of 19.9% (variable) p.a. with a fee of Year 1 - £0, Year 2 onwards - £32 per annum, your representative rate is 26.4% APR (variable).

Compare up to 4 providers

6 differences between a business credit card and a personal card

  • Credit limit. A business credit card will probably have a higher credit limit than you’d get with a personal card. When expenses are high, you might prefer not to strain your personal credit line.
  • Spending controls. Many business cards are designed to have employees added to your account. For that reason, your provider will probably give you extensive tools to manage spending, including downloadable purchase records, spending summaries, expense controls and more.
  • Build business credit. Usually, you won’t build business credit through a personal credit card. Business credit could be helpful down the line, as it can help you obtain loans, insurance and other products.
  • Different benefits. You’ll find more business-oriented benefits with a business card. One typical example is free employee cards, which makes it easier to distribute spending privileges and control expenses.
  • Purchase protection. A noticeable downside of business credit cards is that, unlike personal credit cards, they aren’t covered by Section 75, so you won’t get protection on your purchases.
  • Cost. This very much depends on the card, but in general, business credit cards tend to feature higher annual fees and interest rates than personal credit cards.

Can I use my personal credit card for business expenses?

Generally speaking, yes. If you own a small business, are the only person who needs a credit card and don’t need an especially big credit limit, you can use your personal credit card for business expenses.

However, while your business grows, you may find it more beneficial to get a business credit card. It will help you keep your personal and business finances separate and build up a business credit score. You’re also likely to get a higher credit limit and additional cards you can give to your employees for their expenses.

Can I use my business credit card for personal expenses?

Yes, but we don’t advise it. A top benefit of a business credit card is organising your business spending. When it comes time to work out accounting and taxes, you’re a step ahead with business spending on a designated card.

Putting your personal expenses on your business credit card can also impact your business cash flow. Even if your business is small and it can sometimes feel like your personal and business finances are closely intertwined, you should always keep them separate. It will allow you to plan and budget more accurately and safeguard your personal finances if something goes wrong with your business.

Finally, you most definitely can’t do it if you are an employee who’s been assigned a company credit card. You could lose your job and face legal consequences, among other things.

Pros and cons of business credit cards compared to personal credit cards

Pros

  • A higher credit limit may be available.
  • Use it regularly to improve your business credit score, which can then give you access to better rates on future cards or business loans.
  • You can get additional cards for the rest of your team if you need to.
  • It allows you to neatly organise your business finances and keep them separated from your personal ones.
  • You might be able to connect it directly to your accounting software.
  • You can get rewards and benefits that are targeted to your business.

Cons

  • You may still be personally responsible for the debt on a business credit card if you sign a personal guarantee.
  • There’s no purchase protection.
  • You have less credit card deals to choose from.
  • A business credit card can be more expensive.

The bottom line

Ideally, you want to be using a business credit card for your business expenses and a personal credit card for your personal ones. The advantages of a business credit card include a higher credit limit, the opportunity to build up a business credit score and better tools to manage your business finances (such as additional cards and accounting software integration).

However, you also need to be aware of the catches. With a business credit card you won’t get protection on your purchases. There aren’t as many business credit cards to choose from and in many cases they feature higher fees or interest rates.

All in all, using a personal credit card can be okay while your business is small and you don’t have to provide your employees with additional cards. However, as your business grows, getting a business credit card will probably become a much more practical and money-savvy solution.

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