Corporate credit card vs. business credit card: Key differences

What is a business credit card?

Business credit cards are designed for use by businesses rather than individuals. Using a business credit card rather than a personal card allows business owners to separate their work-related expenses, track spending more easily, and accumulate rewards. 

Example: Pat runs a successful graphic design business, which operates as an LLC. The LLC has a bank account and credit card, which Pat uses to purchase software and other work essentials. The card lists the full name of Pat’s business, with Pat as an authorized signatory.

How do business credit cards work? 

Business credit cards operate the same way as personal credit cards, except that the entity responsible for making purchases and payments is an organization rather than a natural person. 

To open a business credit card, you’ll provide the issuer with information about the business and its revenue. Issuers care primarily about the viability of the company and its credit history; however, you may also need to submit information about your creditworthiness. 

Once approved, you and other approved signatories can use the business credit card to pay for expenses like office supplies, travel, and business development. 

4 benefits of business credit cards

Responsible use of business credit cards can offer a leg up as you grow your organization. Even the most profitable organizations can benefit from access to credit, and business cards offer a convenient way to leverage this tool.

• Accounting clarity. Using a business card for business purchases reduces the risk of accounting errors and simplifies the expense reconciliation process.
• Creditworthiness. If your business may, at some point, need to finance a major purchase, a business credit card can help you build a record before applying for a loan. 
• Benefits and rewards. Many business credit cards offer attractive rewards programs, including cashback and travel points.
• Straightforward qualification. If your personal credit history might give an issuer pause, a business credit card can help you access the credit you need to build your business without extra restrictions or penalties.

What is a corporate credit card?

Corporate credit cards are issued by organizations to eligible employees for authorized business purchases. In addition to simplifying expense management by removing the need for employee reimbursement, corporate cards help you monitor spending by providing approved employees with a dedicated credit card for authorized business purchases. 

Example: Avery is a Senior Vice President for a large industrial company who frequently travels to meet with clients. The company issues him a corporate credit card rather than asking Avery to use personal funds or a credit card to purchase tickets, book hotels, or pay for client meals. Every month, the company receives a detailed statement listing Avery’s charges to verify against receipts.

How do corporate credit cards work? 

Many financial services and technology companies offer corporate card solutions. The best corporate card program for your enterprise will offer features that help control how employees use their corporate credit cards and connect seamlessly with your expense management and accounting tools. 

Example: Rippling’s Corporate Cards allow businesses to provide new hires with corporate credit cards with pre-set, custom spending limits as part of the onboarding process.  

Typically, issuers offer corporate credit card programs to enterprises with a demonstrated history of responsible credit use. To apply, the company submits detailed information about its revenue, business structure, credit history, and size. If approved, the company issues cards to select employees per its expense policies.

4 benefits of corporate credit cards

A corporate credit card can significantly reduce the administrative load if your HR and finance teams spend more time monitoring spend and reconciling records than focusing on strategic work. 

• Custom credit limits. Many corporate credit card programs allow you to set personalized spending limits for individual employees or larger card groups to account for different needs across your organization.
• Enhanced security. Corporate credit cards typically offer more security features to protect against misuse and fraud than a business or personal credit card.
• Streamlined reconciliation. A corporate credit card program that offers real-time access to information about employee spending simplifies the reconciliation process, providing immediate insight into spending patterns. 
• Bulk discounts. Vendors sometimes offer incentives and discounts for corporate cards, which can lead to savings on commonly purchased items and services. 

Corporate credit card vs. Business credit card: 4 key differences 

While business credit and corporate credit cards serve many of the same functions, such as simplifying expense reporting, enhancing spend management, and increasing your company’s purchasing power, they aren’t quite the same tool.

Eligibility requirements 

Due to the enhanced spending power, which can lead to significant liabilities, issuers prefer to offer corporate credit cards to larger enterprises with high revenue and an existing credit history. 

Smaller companies, startups, and sole proprietors may find it easier to qualify for a business credit card, which has a comparatively conservative limit and doesn’t require the same level of creditworthiness.

Spending limits 

Corporate credit card programs typically offer more granular control over employee spending via custom limits for specific individuals or groups. A business card will have a set spending limit that may or may not be distributed across multiple cards. 

• Example: Acme Corp. issues corporate credit cards to five employees on the sales team. Riley, the team leader, can spend up to $1,000 per week on approved expenses, while the four sales reps have access to $500 per week.
• Example: Pat and Avery, the founders of Acme LLC, apply for and receive a business line of credit for $15,000. Each founder receives a business credit card with a limit of $15,000. Pat charges $10,000 worth of expenses to the card in one month, leaving Avery with $5,000 to spend.

Liability requirements

Liability for purchases on a business credit card can shift from the company to the owner if the business struggles to make payments. Corporate cards, by contrast, remain the company's liability unless an employee engages in unauthorized or illegal use of the card.

• Example: Riley uses the Acme Corp. corporate credit card to purchase flights for a personal vacation. Acme Corp. disputes the charge, and the issuer contacts Riley for payment.
• Example: Acme LLC does not meet the projected revenue targets for its first month of operations and cannot make the minimum payment on its business credit card. The issuer reaches out to Pat and Avery to coordinate a payment plan.

Payment terms 

Corporate credit cards usually offer greater flexibility regarding billing cycles, as well as lower interest rates. Centralized billing also means consolidated information, with all employee spending gathered into a single statement.

Business credit cards usually carry higher interest rates and follow the same monthly billing cycle as a personal credit card. Understanding how much each employee spent and where requires parsing separate billing statements.  

Which card is best for your business? 

Joining a corporate card program or opening a business credit card can empower your business to grow more efficiently, but it also comes with the risk of irresponsible spending. Before deciding which solution best suits your organization, consider your business’s spending habits and predicted financial needs.

Company size

Large companies with many employees operating across regions or countries that need to make autonomous purchasing decisions to perform effectively can benefit from the centralization and customization a corporate card program provides.

Smaller and mid-size businesses that make purchases infrequently and don’t have complex expense reporting needs may find that a business credit card better suits their needs. 

Employee spend control

If your business needs multiple cards capable of accommodating different expense policies for individuals and teams, a corporate credit card program offers oversight and flexibility. 

For companies with a single card holder or signatory, on the other hand, a business credit card should more than suffice.  

Fee structures 

Corporate cards may come with more complicated fee structures than a business credit card, which typically has fee structures similar to that of a personal credit card. No matter your issuer or card type, take a look at terms and conditions before committing to avoid any unexpected charges. 

Corporate cards with a built-in back office

Rippling’s Corporate Cards offer high-level visibility and control over employee spending, together with powerful automation capabilities to reduce spend management busywork. 

• Automatically issue corporate cards—with customized spend limits and purchasing controls—during onboarding. Then revoke them during offboarding.
• Hyper-custom spend policies for individual cards and user groups give you tailored control over how, when, and where employees make purchases—while automatically blocking unauthorized spend.
• Unified employee and spend data supports advanced analytics for better financial planning and spend management.

Rippling offers both branded physical and virtual cards for flexibility and security, as well as access to rewards programs and incentives. 

FAQs on corporate vs. business credit cards 

Can you write off business credit card purchases?

Yes, qualifying business expenses purchased with a business or corporate credit card can be written off. To understand whether a purchase made with credit qualifies as a write-off, consult with your finance team or advisor.

Do business and corporate card issuers check your credit?

Card issuers will run a credit check on the business owner before issuing a business credit card, but only for corporate credit cards if the company explicitly shares liability with its employees.

Is it hard to get a corporate credit card?

The difficulty in applying and receiving approval for a corporate credit card largely depends on the size of your business, its overall financial health, and its credit history. Large companies with a solid track record of borrowing and repaying funds will have better luck than new businesses or sole proprietors.

This blog is based on information available to Rippling as of August 27, 2024.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.