Business vs Personal Credit Cards – What’s the Difference, and Can You Take Advantage?

If you want to rack up points through sign-up bonuses, then registering a business credit card, in addition to a personal credit card, is a great way to go about it.

Business credit cards offer similar rewards to personal business cards but are marketed towards people who run a business and need to spend more on purchases. So it’s perfectly okay to sign up for a business credit card even if you don’t own a business. You simply enter your own name instead of the business name when applying; it’s something I did when applying for the SPG Business Card from Amex and The Business Platinum Card from Amex.

Travel Hacking Tip: I always make a point to sign up for the personal card first, charge enough to the card to hit the minimum requirements to get the bonus points, then sign up for the business version of the card and do the same; this way I get to enjoy free (or close to free) flights, hotel stays and upgrades without breaking a sweat. Ie. I first sign up for the regular personal SPG Card by Amex, spend the required account to get the welcome points, then sign-up for the SPG Business Card from Amex.

There are, however, some differences between business cards and personal cards that you should be aware of:

Business and personal cards are different products with separate lines of credit

If you read my blog on credit card churning and Amex’s “Once a Lifetime Policy”, then you know that you can no longer enjoy a sign-up bonus when you apply for an Amex card more than once. However, signing up for the two versions of a card – say, the personal version of the Amex Platinum Card vs the business version – is considered perfectly okay.

You still get to enjoy the incredible sign-up bonus of 60,000 Membership Rewards points from your Personal Amex Platinum card (when you charge $3,000 in purchases to your card within first three months of card membership). And when you sign up for the Business Platinum Card, you will still receive a 40,000-point welcome offer after you’ve spent $5,000 on purchases within the first three months.

Business credit cards offer higher spending limits

Business credit cards tend to have higher credit limits compared to personal credit cards since they expect you to make more expensive purchases to fund your business. This can be a good thing because a higher limit can make it easier to use less of your available credit. Since Business credit scores from Equifax and TransUnion use your credit utilization to calculate your business credit score, this can improve your credit standing.

For more details on what credit card scores and reports mean, you can read my blog titled Does Applying for Credit Cards Hurt my Credit Score?

Business credit offer less protection

Card companies normally provide fewer protections and charge higher interest rates on business cards than for comparable personal credit cards. That’s because personal cards have a cap on the amount of interest and fees they attract, unlike business cards. But this shouldn’t be a cause for concern if you stay up to speed with your monthly credit card payments.

You’ll enjoy different types of rewards

A lot of business credit cards offer rewards on items that tend to be used more by businesses; however, you will find that these are still valuable to you as an individual. These perks can include free access to lounges, Wi-Fi service, hotel stays at discounted rates and so on.

The Starwood Preferred Guest Business Credit Card, for example, offers cardholders unlimited Wi-Fi through their Boingo American Express Preferred Plan, which helps you to stay connected while flying. You can also enjoy free access to Sheraton Club Lounge and redemption for free nights in Starwood properties around the world.

Conclusion

Business credit cards are designed to help small businesses maximize purchases by utilizing bonus points and miles in relevant categories. If your main aim is to access additional perks and bonus points, then acquiring a business card in addition to your personal card is definitely the way to go. Just make sure you pay your credit card balances on time and stay on top of your debt.

 

SPG Personal Card

The Starwood Preferred Guest Credit Card from American Express This is the best card to earn Starwood Preferred Guest Starpoints, considered in some circles as the most valuable loyalty currency.

It comes with a nice sign-up bonus of 20,000 Welcome Bonus Starpoints when you charge $1,500 in purchases to your card within first three months of card membership –  enough points for up to 5 Free Nights Hotel at a Category 2 property! It has a reasonable $120 annual fee, and a low annual income requirement of $15,000.

Apply Now

 

SPG Business Card

The Starwood Preferred Guest Business Credit Card from American Express The SPG Business Card comes with an attractive sign-up bonus of 20,000 Welcome Bonus Starpoints when you charge $1,500 in purchases to your card within first three months of card membership – enough points to redeem for 5 free nights in a standard room at a Category 2 property.

It comes with an affordable $150 annual fee.

Apply Now