Key Differences Between Business vs Corporate Credit Card

Is there any real difference between Business vs corporate credit cards? They might seem synonymous, but what is it that separates them? Business credit cards are often seen in smaller organisations, while corporate credit cards are suitable for larger organisations with many employees. However, choosing between the two is tricky as it depends on factors like eligibility, size of the company, spending, and more. Let’s take a deeper look at the differences between business and corporate credit cards.

What is a Business Credit Card?

These credit cards allow businesses to purchase and pay bills for business-related expenditures. They work like a personal credit card for a business entity rather than an individual. Business credit cards usually allow cardholders to earn rewards or cash back for eligible purchases.

What is a Corporate Credit Card?

Large businesses use corporate credit cards to manage their expenses efficiently. Credit cards are typically issued under the company’s name, allowing employees to charge business-related expenses directly to this card. This streamlines the expense tracking and reporting process.

Factors to Consider

1. Type of Business

This is a key factor to consider before making a decision. Business credit cards are available to companies, including sole proprietors. On the other hand, corporate credit cards are available only for corporations, including C-Corp or LLCs. For instance, a business credit card is more suitable for start-ups, while a corporate credit card is for multinational corporations.

2. Size of Business

Small and medium-sized businesses tend to use business credit cards, while large corporations with significant financial needs often use corporate credit cards.

3. Type of Transactions

The size of the business also determines the credit card’s usage. You should consider moving to a corporate credit card only if you have a significantly higher volume of business transactions. Business credit cards are the best choice for transactions with lower volumes.

Also Read: Different Types of Credit Cards in India

Business Credit Card vs Corporate Credit Card

Let’s explore the difference between business credit card vs corporate credit cards by analysing the following key factors:

1. Eligibility Criteria

Business credit cards are available to small and medium-sized businesses, including sole proprietors and self-employed businesses. Corporate credit cards are often reserved for large companies and corporations with annual revenue of at least tens of lakhs.

2. Application Process

Credit card companies generally streamline the application for smaller businesses, making it easier to apply for a business credit card. However, the application for a corporate credit card involves a comprehensive evaluation of documents, leading to a longer approval time.

3. Expense Management

While business credit cards offer a reporting feature, tracking and analysing business expenditures in detail is slightly more challenging. On the other hand, corporate credit cards usually come with expense management software. This means most of your company’s expenditures are centralised, simplifying expense management. This gives a clear picture of your company’s financial performance at any given point.

4. Liability

The main cardholder is liable for any debt in business credit cards. The business owner is solely responsible and due for credit checks. Whereas, it is the company that is liable for corporate credit cards. Employee cardholders can also share the liability and are made accountable for any wrongful expenses.

5. Credit Card Costs

Business credit cards are comparatively more cost-effective. Credit card companies typically charge a flat or no annual fee for business credit cards, with no extra or hidden costs. Corporate credit cards have high annual fees as they offer more administrative features, such as automated tracking software.

6. Credit Limit Check

For business credit cards, only the business owner will go through credit checks, and the credit limits are based on the business owner’s credit history. On the other hand, credit card companies evaluate relevant financial statements like the P&L and balance sheet before allocating a credit line for corporate credit cards.

One Credit Card offers business and corporate credit cards while getting a complete overview of your spending on the One Credit Card dashboard. Ultimately, the difference between a business vs corporate credit cards will depend on the specific needs of your business. In comparison, both credit cards are for different types of businesses, spending and liabilities. Careful consideration of these factors can help you make an informed decision and select the credit card suited to your business needs.