Business credit card terms typically work a little different than personal credit cards. This article will review the pros and cons of business vs. personal credit cards and give you tips on what to look for when applying for a business credit card.

Many people are familiar with the individual credit cards that are so pervasive in today's society. What many people do not realize, though, is that there are credit cards issued to businesses as well. Because a business is considered an entity, it is possible to have its own credit rating, its own loans and its own credit cards.

Business credit cards can be a great way for businesses – especially small businesses – to earn perks and to gain rewards. They also provide a way to improve cash flow and ensure that a company receives what it needs in terms of equipment and services.

Benefits of business credit cards

There are plenty of benefits associated with business credit cards. Some of these benefits include:

• Higher credit limits. Because businesses are assumed to make more than individuals, often credit limits are higher for businesses. Some credit cards do not even put credit limits on their business customers.
• Low APRs. You may find that a business credit card offers an APR that is lower than many individual cards. This makes borrowing the money much cheaper as a business.
• Insurance protection. Insurance protection is usually one of the perks of business credit cards. This often covers rental cars, plane tickets and other expenses.
• Discounts. Many business credit cards offer access to discounts on goods and services. In many cases, it is possible for a business to participate in a network where discounts are shared, and where good connections and business relationships can be forged.
• Additional cards. If you have employees that you want to have additional cards – or even personalized cards – this is usually possible with no extra charge. In many cases, these extra cards are trackable, so you can monitor the kind of spending your employees are doing with your business credit cards.
• Reward programs. One of the great things about business credit cards is that generous reward programs are often offered. You can receive combined points from all of the cards your business uses. Additionally, it is possible to leverage rewards for common expenses into travel, services, goods and even statement credit. This can help you business save money overall.

Things to consider about business credit cards

Before you apply for business credit cards, it is important to carefully think through the process. Realize that your business will have to have some sort of credit history (are you making regular payments on a start-up loan) and that your limit and other perks will be based on your business credit history. Also, ask questions about the following:

• Introductory rates. Just like personal cards, business credit cards have introductory rates sometimes. Make sure you know the intro rate, and how long it will last. Also, make sure you know whether it applies to balance transfers as well as new purchases.
• Variable or fixed interest rate. Some business cards come with a fixed rate. Most, however, are variable these days. Make sure you understand the difference, and you know that your rate could go up.
• Know your fees. Business credit cards come with transaction fees, late payment fees, annual fees and other fees. Make sure you know all of the fees that you might be charged. Some of them may be waived if you spend a certain amount each year on the card.

A business credit card can be a big help to you. However, you should be aware of what you are doing, and you should choose your business credit card carefully.