Business credit is different than personal credit in the following ways: it may not be covered by consumer protections, credit payments affect business and sometimes personal credit also, credit lines are higher and rewards are different, according to Nerd Wallet. A small business owner should consider getting a line of business credit, depending on the needs and scope of the business.
Laws that protect credit card consumers from predatory interest rates and unfair fees, such as the Credit CARD Act of 2009, do not apply to business credit cards usually, reports Nerd Wallet. Business owners should read their agreements closely when opening up a business credit card account. While business cards are very effective for establishing a business credit rating that could help in obtaining business loans, people should be aware that if they sign a personal guarantee on their business credit accounts, as is often required, any negative actions also affect their personal credit ratings.
On the other hand, business credit cards usually offer a higher credit limit than personal credit, making it easier to use less of it and improve an individual's business credit rating, explains Nerd Wallet. Business credit cards also offer the types of rewards that may be useful to a business and may offer deductions on Internet service, office supplies or other items related to business activities.