Corporate cards are less risky for individual cardholders, since responsibility for debt is tied to the company rather than to employees or shareholders.
That said, you should only consider a corporate credit card if you own or represent a major corporation that can easily meet the eligibility requirements for a corporate card. All other business owners should opt for a business credit card.
| Business credit cards | Corporate credit cards | |
|---|---|---|
| Eligibility | Available for all types of businesses, including freelancers and sole proprietors | Only available to corporations:
|
| Personal guarantee required | ||
| Set spending limits for employee cards | ||
| Expense tracking and accounting tools | Basic | Advanced |
| Offers rewards on spending | Rewards are intended to reinvest in business | |
| Offers business perks and benefits |
Corporate credit cards are designed for established companies with a minimum of $4 million in annual revenue.
Corporate credit cards work as a large-scale payment solution, giving companies fine-grain controls and expense management tools for a large number of employee cards. Corporate cards require an established business credit history rather than a personal guarantee. If the company goes under, the business is typically responsible for any debt accrued.
| Pros | Cons |
|---|---|
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 | Stringent eligibility requirements Only available for large corporations Positive business credit history required for approval May perform a hard credit pull on individual employees to make them authorized users |
While freelancers and start-ups can apply for a small business card, 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 an established business credit score. The company will also typically need to meet the card issuer’s threshold for the minimum number of employees and annual revenue.
When you start to issue corporate cards to dozens (or even hundreds) of employees, tracking and managing employee spending can become difficult. That’s why corporate credit cards are equipped with analytics tools. These tools help your company grow and scale, making sure you don’t lose control of expenditures along the way.
The best corporate credit cards come with powerful analytics tools that allow company accountants and managers to track spending across departments, vendors and even individual employees. These tools also streamline the process of reconciliation and reimbursement.
Much like business credit cards, corporate credit cards often earn rebates and rewards on spending in the form of cash back, points or miles. Cards also frequently come with perks like airport lounge access, Global Entry and TSA PreCheck credits.
These rewards are often credited back to the main company account, though some corporations allow employees to keep the points they earn from corporate card spending. 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.
The responsible use of corporate credit cards will positively affect the business’s credit score. This means paying the total 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.
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 will have a small, temporary impact on your FICO score. 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 your company card and never use a corporate credit card for personal expenses to avoid running into trouble.
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 making the business owner personally responsible for all expenses charged to their card.
| Pros | Cons |
|---|---|
Easily track and limit employee spending Earn rewards on common business purchases Higher credit limits than personal credit cards Separate business and personal expenses Responsible use improves business credit score Access to account management tools | Usually requires a personal guarantee High interest rates and late fees Misuse can negatively impact your business credit |
The best 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. Many business credit cards offer valuable business perks like free employee cards, for which you can set spending limits and earn rewards.
You may also receive access to helpful accounting tools and resources that will help you stay on top of your finances. While corporate credit cards have strict eligibility rules, business credit cards are available to any type of business, including:
To be approved for a business credit card, you’ll typically have to undergo a credit check and provide proof of business ownership.
The best small business cards provide valuable rewards and business perks that help you boost your bottom line.
The Business Platinum Card® from American Express offers extensive travel perks and business credits (enrollment required) that more than make up for its high annual fee. But its rewards rate is what makes it stand head and shoulders above the competition: You’ll earn 5X Membership Rewards Points® on Flights, and Prepaid Hotels Booked through AmexTravel.com. 1X points on other eligible purchases. Earn 1.5X points (that’s an extra half point per dollar) on each eligible purchase at US construction material, hardware suppliers, electronic goods retailers, and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more, on up to $2 million per Card Account per calendar year. Purchases eligible for multiple additional point bonuses will only receive the highest eligible bonus.
Other benefits: Perks like airline fee credits*, business credits* and complimentary access to 1,400+ airport lounges.
The Ink Business Unlimited® Credit Card (see rates & fees) can help you save hundreds or thousands of dollars in interest payments on start-up costs or a large business purchase. You’ll pay a 0% Intro APR on Purchases for 12 months. After that, the APR is 17.49% - 23.49% variable. Plus, the card offers a valuable sign-up bonus and lets you earn unlimited 1.5% cash back on every purchase made for your business.
Other benefits: Redeem rewards for cash back, gift cards, travel and more through Chase Ultimate Rewards®.
For small business owners who travel frequently for work, the Hilton Honors American Express Business Card can be extremely lucrative. For a $195 annual fee (see rates & fees), 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 protections1, free employee cards, complimentary National Car Rental® Emerald Club Executive® status (enrollment required) and more.
Other benefits: Free weekend night rewards, Priority Pass™ Select membership (enrollment required), free employee cards and no foreign transaction fees.
Business credit cards often require a personal guarantee, which means the issuer could report late payments and other negative activity on your account to your personal credit report. Some — though not all — issuers will even report your payment history to your personal credit report.
When lenders are deciding whether to issue a credit card or loan to your business, they use your business credit score to determine how risky it will be to lend to your business. If your business or corporation has a history of making regular, on-time payments, your business credit score will be strong, and you will typically get lower rates and better terms. But if you’re establishing a new business, lenders will typically look at your personal credit score to determine how creditworthy you are.
Having a corporate credit card doesn’t affect your personal credit because corporations rather than individual business owners are liable for corporate accounts. However, a corporate credit card can impact your business credit. With responsible use — like making regular, on-time payments with your corporate card — you can improve your business credit score.
To see rates & fees for American Express cards mentioned on this page, visit the links provided below:
The content above is not provided by any issuer. Any opinions expressed are those of LendingTree alone and have not been reviewed, approved, or otherwise endorsed by any issuer. The offers and/or promotions mentioned above may have changed, expired, or are no longer available. Check the issuer's website for more details.
