Business credit cards account for less than 4 percent of all credit cards in circulation, but approximately one in every six dollars charged, amounting to $430 billion in 2015, according to the Mercator Advisory Group.
Although most of the businesses that apply for business credit cards are approved, the Small Business Association cites MasterCard data stating that 46 percent of small business owners continue to use their personal credit cards to pay for business expenses.
There are, however, some differences between business and consumer credit cards. Consider the following.
Business-centric rewards and perks. You can often earn more miles or points when you use your business credit card to pay for typical business purchases, such as office supplies, computer hardware and software, phone and internet bills, or for business travel. Perks frequently include travel-related assistance, conveniences, discounts or insurance.
Expense management tools. Business credit cards frequently provide account management tools that help you track expenses, attach receipts and import transactions into your accounting program.
Higher credit limits. Card issuers expect business credit card holders to spend more than consumers; some cards don't have a preset spending limit. If you use your credit card to purchase more than office supplies and incidentals, this can be a useful feature.
Higher late fees. The 2009 CARD Act doesn't apply to business credit cards. The main difference business owners will notice is higher late fees. In 2016, the CARD late fee cap was $38, though business credit card late fees can cost as much as $49, according to a fee survey conducted in 2015 by CreditCards.com. However, some of the best card issuers extend CARD consumer protections to their business customers. As with any business service, read the terms and conditions before signing up so you understand your obligations.
Lower APRs. Business credit cards usually have lower APRs than consumer cards, according to CreditCards.com's Rate Report. However, rates can be more volatile, as business credit cards aren't subject to the CARD Act and issuers aren't required to provide notification when they raise your rates.