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Corporate Credit Cards: How They Work, and Differences vs. Business Cards

Corporate Credit Cards: How They Work, and Differences vs. Business Cards

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Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.

While small business credit cards typically require a personal guarantee, corporate credit cards do not. However, corporate credit cards are only intended for large businesses, and usually require your business to have an annual revenue of over $4 million.

Corporate cards are less risky for individual cardholders, since responsibility for debt is tied to the company the card is issued to (and possibly employee cardholders who make unauthorized purchases) — not any one individual.

That said, you should only get a corporate credit card if you are a major corporation who can easily meet the eligibility requirements for a corporate card. All other business owners should opt for a business credit card, which is largely the same, but requires a personal guarantee.

Corporate credit cards vs. business credit cards

Business credit cards
Corporate credit cards
EligibilityAvailable for all types of businesses, including freelancers and sole proprietorsOnly available to corporations:
  • C-Corp
  • S-Corp
  • Select LLCs
Personal guarantee required
Set spending limits for employee cards
Expense tracking and accounting toolsBasicAdvanced
Offers rewards on spending
Rewards are intended to reinvest in business
Offers business perks and benefits

What are corporate credit cards and how do they work?

Corporate credit cards are designed for companies with numerous employees and enormous annual revenue, usually requiring a minimum of $4 million. These cards anticipate a high number of authorized users and don't require a personal guarantee, meaning that if the company goes under, no single individual is responsible for debt accrued; instead, it's on the business itself.

Pros

  • No personal guarantee required
  • Earn rewards on spending
  • Can issue company cards to many employees and set spending limits
  • Access to advanced accounting tools to keep track of spending
  • Easier for employers and employees to manage company spending

Cons

  • Stringent eligibility requirements
  • Only available for large corporations
  • Employees don't earn personal rewards on their spending
  • Positive business credit history required for approval
  • Can potentially have a negative impact on your credit score
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Stricter eligibility requirements

Corporate credit cards are best for corporations:

  • With an annual revenue of at least $4 million
  • With a high number of employees to spend on company credit cards
  • Who can meet the strict eligibility requirements
  • Can often benefit from these types of cards

A major difference between small business credit cards and corporate credit cards is that anyone can apply for a small business card, while corporate credit cards have much more stringent eligibility requirements.

For example, corporate credit cards can only be acquired by S-Corporations, C-corporations and LLCs with a pre-established business credit score. You'll also typically need to have a certain amount of employees, and a high annual revenue, as we mentioned previously.

Analytics tools

Corporate credit cards are often equipped with powerful analytics tools that allow company accountants and managers to keep a better grasp of where money is being spent. Banks such as Capital One or American Express allow their business clients to set up different tracking options — whether it be by department or different vendors. Having this level of control is also important when it comes to reconciliation and reimbursement.

Because corporate credit cards are often issued to a large number of employees, keeping track of the different spending can become difficult. As your company grows and expands, corporate credit cards are designed to scale with it, making sure your company doesn't lose any control of its expenditures.

Rewards geared for large corporations

Much like with business credit cards, corporate credit cards often earn rebates and rewards on their spending, in the form of cash back, points or miles, and can come with perks like airport lounge access, Global Entry and TSA Precheck credits and more.

These rewards, however, are typically credited back to the main company account. Most issuers also offer non-rewards options, specifically meant for large companies and nonprofits (with revenue of more than $10 million) that have internal corporate policies preventing them from taking in this kind of revenue or price reduction benefits.

How does a corporate credit card impact your credit score?

Much like with a personal or small business credit card, the responsible use of corporate credit cards by a corporation will positively affect the credit score of the business. This means paying the balance of all company-issued cards in full and on time each month. Failure to do so will result in a negative impact on a business's credit score.

However, if you are an employee about to be issued a corporate credit card, some issuers may run a credit check against your personal history. This hard pull on your credit history will have a temporary impact on your FICO score, though it is minimal. However, late payments and delinquencies on the company's side will not negatively impact your credit score. As an employee, it's important to follow your company's policy on spending on company cards and never use a corporate credit card for personal expenses to avoid running into trouble.

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What are business credit cards and how do they work?

Business credit cards allow small business owners and their authorized users to charge all their business expenses to a business account. The primary difference between business credit cards and corporate credit cards is that business credit cards typically require a personal guarantee, meaning the business owner is personally responsible for all expenses charged to their card.

Pros

  • Easy way to track and limit employee spending
  • Earn rewards on spending
  • Higher credit limits than personal credit cards
  • Keeping business and personal expenses separate
  • Responsible use improves business credit score
  • Access to account management tools

Cons

  • Usually requires a personal guarantee
  • High interest rates and late fees
  • Misuse can have a negative impact on your credit score
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Business credit cards are best for small businesses owners:

  • Who want to keep their personal and business expenses separate
  • With several employees who need access to company funds
  • Who are interested in earning rewards on their spending
  • Who are willing to give a personal guarantee

The most rewarding business credit cards offer rewards and benefits to their cardholders, much like personal credit cards. However, business credit card rewards tend to be more lucrative and credit limits are typically higher than personal credit cards because businesses generally spend more. Many business credit cards offer valuable business perks like free employee cards, for which you can set spending limits and earn rewards on card spending. You may also receive access to helpful accounting tools and resources that will help you stay on top of your financials.

While corporate credit cards have strict eligibility rules, business credit cards are available for any type of business, including:

  • Freelancers
  • Small business owners
  • Sole proprietors

In order to be approved for a business credit card, you'll typically have to undergo a credit check and proof of business ownership.

What are the best business credit cards?

There are numerous business credit cards available for small business owners. The best small business cards will provide strong rewards and business perks that can be valuable for your company.

Best for rewards: Ink Business Preferred℠ Credit Card

On Chase's Secure Website

The Ink Business Preferred℠ Credit Card is excellent for businesses who value earning rewards on their spending, and who can appreciate a generous sign-up bonus: Earn 100,000 bonus points after you spend $15,000 on purchases in the first 3 months from account opening. Cardholders can also Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn.

You also have a variety of flexible redemption options, including transferring your points to a Chase travel partner to increase their value through Chase Ultimate Rewards®.

  • Annual fee: $95 annual fee
  • Sign-up bonus: Earn 100,000 bonus points after you spend $15,000 on purchases in the first 3 months from account opening.
  • Earning rate: Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn.
  • Other benefits: Flexible redemption through Chase Ultimate Rewards®, free employee cards, $0 foreign transaction fees, travel and purchase protections

Best for 0% intro APR: American Express Blue Business Cash™ Card

The American Express Blue Business Cash™ Card has a lot to offer small business owners, including a nice 0% interest offer: Intro APR of 0% on purchases for 12 months from date of account opening. After that, the APR is 13.99% - 21.99% Variable. You'll also earn a $250 statement credit after you make $3,000 in purchases on your Card in your first 3 months (redeemable for statement credits). Plus, Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1% (redeemable for statement credits), all for No annual fee.

The cash back earned with this card is automatically credited to your account statement, making redeeming your rewards easier than ever.

  • Annual fee: No annual fee
  • Welcome offer: Earn a $250 statement credit after you make $3,000 in purchases on your Card in your first 3 months (redeemable for statement credits)
  • Earning rate: Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1% (redeemable for statement credits)
  • Intro APR: Intro APR of 0% on purchases for 12 months from date of account opening. After that, the APR is 13.99% - 21.99% Variable.
  • Cash back automatically credited to your account statement
  • Terms apply

Best for hotel points: The Hilton Honors American Express Business Card

For small business owners who travel frequently for work, The Hilton Honors American Express Business Card can be extremely lucrative. With a moderate annual fee of $95, cardholders will receive complimentary Hilton Honors Gold status with the opportunity to earn Diamond status when they spend $40,000 on eligible purchases in a calendar year (enrollment required).

You'll also get a suite of purchase and travel protections, free employee cards, free weekend night rewards with Hilton, a Priority Pass™ Select membership (enrollment required) and more.

  • Annual fee: $95
  • Welcome offer: Earn 130,000 Hilton Honors Bonus Points after you spend $3,000 in purchases on the Card in the first 3 months of Card Membership. Plus, you can earn up to $130 in Statement Credits on eligible purchases made on the Card at any of the Hilton family hotels in the first 12 months of Membership. Offer expires 7/6/2022.
  • Earning rate: Earn 12X at hotels and resorts in the Hilton portfolio, 6X on Select Business & Travel Purchases, 3X Everywhere Else. Terms & Limitations Apply.
  • Elite status: Complimentary Hilton Honors Gold status with the opportunity to earn Diamond status (enrollment required)
  • Other benefits: Free weekend night rewards, Priority Pass™ Select membership (enrollment required), free employee cards, None foreign transaction fees
  • Terms apply

FAQs

Do business credit cards affect personal credit?

Whether or not your business credit card will affect your personal credit will depend on if your specific card reports to consumer credit bureaus. If it does not report to consumer credit bureaus, your business credit card activity should not affect your personal credit score. However, if it does report to consumer credit bureaus then it may affect your personal credit score.

Does having a corporate credit card help your credit?

Having a corporate credit card should not affect your personal credit, as corporate credit cards don't require a personal guarantee. However, a corporate credit card can impact your business credit score. With responsible use, it can improve your business credit score and with misuse, it can harm your business credit score.

The information related to American Express Blue Business Cash™ Card and The Hilton Honors American Express Business Card has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Advertiser Disclosure: The products that appear on this site may be from companies from which ValuePenguin receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). ValuePenguin does not include all financial institutions or all products offered available in the marketplace.

How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).