There are a few key differences between personal credit cards and business credit cards and understanding them can help you decide which card may be better for you and your business.  

The main difference between both card types is that business credit cards are usually in the name of the company rather than the individual and can offer much higher credit limits to reflect the business’s monthly turnover and spending. They also allow multiple staff members to have their individual business credit cards which makes organising expenses a lot easier.

The main differences are:

  1. Account name;
  2. Credit limit;
  3. Ability to organise income and expenses;
  4. Fees;
  5. Eligibility;
  6. Protection; 
  7. Rewards.

 

A business credit card is in your company name

A business credit card is in your company name, whereas a personal credit card is in the individual’s name (whether it is for you, your spouse or your child).

A business credit card can be used by multiple people within the organisation. Most business credit card providers offer supplementary cards at no extra cost that can be given to your partners or employees. 

 

Business credit cards usually have higher limits

Business credit cards will typically come with higher limits since this is based on a business’s annual turnover and spending, rather than the individual’s.

 

You can organise your income and expenses separately

One of the main benefits of a business credit card is that you can keep any business expenses separate which makes it easier when organising your tax return for the HMRC. 

If you are making business purchases through a personal credit card, your business expenses can often overlap with your regular non-business expenses, making your accounting a bit more of a hassle.

 

Business credit cards may come with fees

Business credit cards may come with an annual fee, whereas personal credit cards usually do not. Some business credit card providers may offer standard and premium credit cards for businesses where the standard one has no annual fee attached to it.   

 

Business credit cards require a minimum turnover

Business credit cards require you to have a minimum monthly or annual turnover to be eligible and you may need to have been trading for a certain period of time.

Whether you are a freelancer, self-employed, sole trader or trading business, you will typically need to be a limited company, registered with Companies House and have a unique tax reference number.

For personal credit cards, you simply need to be 18 and have some form of regular income – although a credit card can also be given to you, but paid for by a parent or spouse. 


Business credit cards come with different levels of protection

Business credit cards do not come with the usual section 75 protection that you get with personal credit cards – meaning that the Financial Services Compensation Scheme will not cover you for up to £30,000 worth of transactions for faulty, defective or broken items or purchases.

However, some card providers can offer you compensation for fraudulent use of your card and misuse by employees. 

Read more about the protection you get with your business credit card here. 

 

Rewards are better with business credit cards

Personal credit cards may offer a wider range of rewards but the rewards you can earn on your business credit card are usually far greater as the business expenses are higher than the personal ones. Using your credit card to pay for things like business travel, equipment, office supplies or marketing spend is a great way to quickly rack up reward points. 

Read more about rewards credit cards here.