Last updated on June 26th, 2023

Businesses usually have two credit card options: small business credit cards or corporate credit cards. However, they each have their own different required qualification for approval and both will work for different sizes and types of businesses. Here’s what you need to know about small business credit cards vs corporate credit cards.

Small Business Credit Cards vs Corporate Credit Cards

Using credit cards to run a business comes with perks you might not see available for personal cards. Credit cards, intended for businesses, typically offer higher credit limits, lower interest rate offers, discounts, and more. However, there are two types of credit cards made for running businesses: small business credit cards and corporate credit cards.

Essentially, both types of credit cards do the same things. Still, they both have some weighty differences. The distinction between corporate credit cards and small business credit cards lies within their debt liability, eligibility, and offered perks.

Know The Difference

The biggest and most noticeable polarity is debt liability. With small business credit cards, the business owner is personally responsible for any debt acquired with card use – including debt on additional employee cards. Small business credit cards also directly affect the business owners’ credit. If small business credit cards get used irresponsibly, it will harm the business owners’ credit scores and vice-versa.

In contrast, with a corporate credit card, debt or financial liability does not fall on the business owner. Instead, debt responsibility or liability rests on the business itself. For this reason, eligibility for corporate credit cards is much stricter for approval.

Who Benefits From A Small Business Credit Card?

Freelancers and small business owners would get the most use out of a small business credit card. These kinds of credit cards are better suited to fund small business needs. Business credit cards can be used by businesses of all sizes, from small side hustles to multi-million dollar revenue businesses.

To get approved for a business credit card, you usually need two common requirements. One is a “fair” personal credit score. A fair credit score is the minimum requirement but a higher credit score is always better. The second common requirement is the business tax ID (EIN number) or social security number.

Pros

• Earn rewards for your business spending and your employees’ spending
• Easy approval without a substantial credit history
• Easy to compare credit card tools online

Cons

• Not all cards have expense-tracking tools
• Business owner is liable for all debt acquired
• Employees cannot be made liable for employee cards

BILL Divvy Corporate Card	Ramp Card

Good Candidates for Corporate Credit Cards

Corporate credit cards are for established businesses with big revenue – in other words, incorporated businesses. To get a corporate credit card it is commonly required to have a certain business structure (C-Corp, S-Corp, or some LLCs.) It is also required to have an established business credit history, which is not necessary for approval on a business credit card. There is also a revenue requirement, usually upwards of $250,000. Something to note is that with corporate credit cards, you can give your employees purchasing power and monitor their expenses.

Pros

• Employees can be made liable for purchases
• Manage and monitor expenses for hundreds of employees
• May be able to earn rewards
• Expense reporting and analytics tools
• Expense management systems integration

Cons

• Strict approval requirements
• Usually comes with fewer protections on purchases
• Established business credit history is required

GM Business Card™	Revenued Business Card Visa®

The Bottom Line

Small business credit cards are best suited for business owners with an interest in earning rewards for their business purchases, as well as covering daily expenses to keep their companies running. However, small business credit cards have a lot more to offer, such as access to credit, money management and accounting software, and more. Corporate credit cards also hold similar benefits but are best suited for established organizations with large revenue and operations. An obvious perk is that with a corporate credit card, employees can also share liability. It’s a feature that small business credit cards don’t have.

So, who wins the business credit cards vs corporate credit cards debate? There is no winner. The “right” type of card depends on the type of business you find yourself running. If you operate a small-to-medium-sized business – or are planning to open one – a business credit card can be a great asset that will help you not only cover daily expenses, but also potentially earn rewards for it. If you manage a large firm with several employees, purchasing responsibilities, and sophisticated operations, opening a corporate card account will be the ideal move, as it’s designed to scale with the size of your business.

Related Article: Top Business Cards You’ve Never Heard Of

Featured image by DAPA Images/Canva