What the hell are business cards anyway? How are they different?

As you probably know, there are business credit cards, and personal credit cards.  It turns out that they’re made out of the same kind of plastic. So what makes them different? And do you care? I dunno. That’s all about you.

A personal card is pretty much what you think of when you think of a credit card, so I don’t need to say much more about that. And on all the personal cards I’ve seen, if you add an authorized user, the card number is actually the same.

Here’s the thing that took a minute for me to wrap my brain around: As long as it doesn’t confuse you, you can use business cards for your personal expenses, and personal cards for your business expenses. They’re just fuckin’ cards that do the same thing: buy now, pay later. (But hopefully not much later.)

Things that make a business credit card:

  • You have to own a business to get one. However, your business can be any kind of sole proprietorship, like selling your old crap on eBay. Or, you’ve ever filed a 1099, you’ve got a business. Depending upon the card you apply for, you may or may not need to show (or at least claim) a certain number of years in existence, and gross profit.
  • It says the business name on the card, in addition to your name. If you don’t have a business, exactly, I propose “Dog Vomit, Inc.”
  • Business cards that earn rewards typically earn bonus points in “business” categories such as office supply stores, or shipping, rather than personal categories like grocery stores.
  • Rather than having authorized user cards, you have employee cards, each of which has a unique number.
  • The card issuer provides online tools specifically geared towards businesses, such as receipt logging, and employee spending tracking.
  • Many business cards, such as those from Chase, Citi, and Amex, do not report to your personal credit report as long as you pay your bills on time. This can be a good thing if you anticipate applying for any kind of Chase card in the next two years, because if they’re not visible on your personal credit report, they won’t count against Chase’s maximum-five-new-cards-with-anyone-in-last-two-years rule. On the other hand, the lack of reporting can also be a bad thing if you want to enhance your credit history.
  • If you have a separate business with a separate tax ID, you can get multiple cards of the same kind.
  • You don’t get various legal protections that you get with personal cards. (For more info on this, see this helpful post at MagnifyMoney.)

I definitely want to keep my personal and business expenses separate, so I have my personal Chase Sapphire Reserve, and another of the same card (distinguished via nail polish) for our business (it’s actually Caroline’s card, and I’m an authorized user). Though that’s a “personal” card, I do this because I want to max out on points, and our particular business incurs a shit ton of taxi expenses (that’s when I do my office work between clients). Taxis earn 3 points per dollar on the Sapphire Reserve, whereas they earn only 1 point per dollar on Chase “business” cards (Ink Plus and Ink Cash). So even though the Ink cards get me 5 points per dollar spent on cell phone, internet, and office supply stores, that’s nothing compared to those sweet taxi points. (Of course, nothing says I can’t have both, and pick my spots, and in fact, I do.)

And, similarly, even though I’ve moved out of Amex world, two weeks after I closed my Business Gold Rewards card, they offered me another one with first year free and a 75,000 point bonus. That was an offer I’d be a dope to refuse, especially since their bonuses are usually unavailable if you’ve ever had the card before. But to get that, I have to spend $5,000 in three months, so right now that card is in my wallet as my personal expense card.

So, get a business card, get a personal card, organize maximizes your earnings. As long as you pay your bills on time, it’ll all work out.

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