Corporate Card VS Business Credit Card: Which Is Right For Your Small Business?

If you’re confused about the differences between corporate cards vs. business credit cards, don’t fret — we’ve written this article just for you. Corporate and business cards are aimed at different kinds of businesses. Choosing the right one for your business may not be a black-and-white decision.

Corporate credit cards are designed for large companies and corporations. This means that issuers will expect your company to either have a sizable number of employees or gain millions in revenue per year — or both.

Business credit cards, meanwhile, work similarly to traditional personal credit cards. They often have minimal application requirements and can be great options for smaller firms — even sole proprietors can benefit from getting a business credit card.

Is a corporate card right for your company, or should you stick with a more traditional business credit card? Read on, and we’ll take an in-depth look at the similarities and differences between types of business credit cards.

Differences Between Corporate & Business Credit Cards

As can be expected, corporate cards and business cards are their own separate beasts. Here are a few key differences between corporate and business credit cards to consider if you’re planning on upping your company to the corporate variety:

Eligibility Requirements

With their slew of requirements, corporate cards will usually pose more of a challenge to get. In some cases, you may need to post $4 million in annual revenue or have at least 10-15 employees. Almost always, your company will need to be registered as an S corporation, a C corporation, or an LLC. Business cards, meanwhile, are much easier to get, making them more appealing for smaller businesses with minimal cash flow and a low number of employees.

Liability

When it comes to corporate cards, the company is usually responsible for the debt, protecting the owner’s personal credit score. Because business cards often require a personal guarantee, a company’s owner is on the hook for any debt. Additionally, employees with a business credit card may be subject to a credit check before becoming an authorized cardholder.

Employee Card Features

A key draw to corporate credit cards is their ability to set spending rules and purchasing limits on employee cards. This enables your company to manage budgets and cash flow more easily without dealing with the hassle of approving every employee purchase. Business credit cards may have some tools to manage employee spending, but they often won’t be as robust as what a corporate card offers.

Additionally, corporate credit cards generally don’t place a limit on the number of employee cards your company can request. While a few business credit cards allow an unlimited number of employee cards, some apply a cap (American Express, for example, allows up to 99 employee cards on a single business credit card account).

Rewards Programs

With a few exceptions, corporate credit cards tend to offer bare-bones rewards schemes — such as just generating 1 point for every dollar. Business credit cards, meanwhile, tend to have unique and interesting rewards programs. Often, these cards incorporate bonus purchase categories targeted toward business spending — such as extra points for making office supply purchases.

Flexibility

While business credit cards may feature more appealing rewards programs upfront, corporate credit cards can offer a bit more flexibility when it comes to rewards structures and available benefits. It’s not uncommon for issuers to work with a company to design a card that best fits the company’s spending profile. With business cards, you usually won’t have any sort of customization — although there are many more options available.

Choices, Choices, Choices

In the world of business credit cards, you have plenty of choices. Numerous issuers offer business credit cards, and each issuer has an endless variety of different business credit cards. On the other hand, corporate cards have traditionally been maintained by a few select financial institutions– American Express, Capital One, and J.P. Morgan lead the small pack of corporate card issuers.

It’s worth noting that this fact has been changing a bit recently. Modern fintechs, such as Brex, Ramp, and Divvy, are disrupting the industry with a new breed of corporate cards designed for forward-thinking companies. If more fintech startups begin to challenge longstanding financial titans such as Amex and J.P. Morgan, we may soon see a world filled with a cornucopia of corporate cards.

Corporate VS Business Card: Which Is Best For Your Small Business?

Ultimately, the best option for your business will depend on your specific use case. Generally, though, smaller businesses with only several (or no) employees will be best suited to apply for a business credit card. Larger companies with more significant cash flows will fully be able to take advantage of what a corporate credit card offers. Businesses in between a large business and a very small business may have a harder decision to make.

Get a business credit card if…

• You run a business that only needs a few employee credit cards (less than 10-15)
• Your business doesn’t generate millions in annual revenue or lacks much cash in the bank
• You can be held personally liable for credit card debt

Get a corporate card if…

• You need many employee credit cards (more than 10-15)
• Your company needs a robust way to manage employee spending
• You want your company to be held liable for credit card debt

Get The Right Credit Card For Your Business

As your organization grows, you’ll find that new credit options become available to your business. While these offer some distinct advantages, you’ll still want to weigh the pros and cons with your accounting team to determine whether the benefits outweigh the costs.

If you think that a corporate card is a good fit for your business, take a look at some of our favorite corporate cards for businesses. If a corporate credit card seems like overkill, or if your business isn’t yet big enough to qualify for one, check out our favorite business credit cards to see what your options are.