If You Default On Payments, It Is Your Personal Credit History That Is Hurt

Category: Finance, Credit.

Business credit cards come in a variety of forms, which can seem a little overwhelming to someone that doesn t know the difference between the different types of cards.

In fact, small businesses are the driving force behind the American economy and create the most new jobs every year. When it comes to business credit cards, the largest percentage of the market is small business owners. Therefore, credit card companies have developed business credit cards with the small business in mind, but there are some differences between business credit cards for small businesses as compared to those for corporations. One major difference between corporate credit cards and small business credit cards is how you found out about it in the first place. Where You Find It. For the most part, small business credit cards are those that you see advertised on the Internet and for which you might receive a pre- approval invitation.

Customizing. Corporate credit cards are not advertised in the mass media because they are set up differently, and target a, operate differently different group of people. When it comes to small business credit cards, you have to take what you can find. When it comes to corporate credit cards, the business can request options to be custom- made to work with the company. Of course, you can compare business credit cards to find the ones that suit you best, but you don t really have much room for making changes to the card to meet your needs. The reason for this increased flexibility comes down to revenue.

This ability to customize is another reason why you generally don t see corporate business credit cards being advertised within the mass media. A corporation placing millions of dollars of transactions on the credit card can have more say in how the card is set up. Of course, corporations generally have greater needs when it comes to their financial responsibilities than a small business owner. The ability to track all of these expenses so closely requires the use of specialized software that is designed to interface with platforms from human resources. Options they might need to have included on the card are often meant to help the corporation keep track of expenditures and to review and approve them in order to reimburse employees for entertainment and travel. Payment Responsibility.

As a small business owner with a sole proprietorship, you and the business are one and the same. Another major difference between corporate credit cards and small business credit cards is the matter of who is responsible for repaying the debt. This means you are personally responsible for repaying any debt that may have incurred. A corporation, on the other hand, is separate from the owner. If you default on payments, it is your personal credit history that is hurt. Therefore, the corporation is responsible for repaying the debt. It s in the Name.

As such, the corporation may default on the credit card loan and file for bankruptcy, but you do not personally file. Since a small business owner is generally a sole proprietorship and you are personally responsible for the debt, another difference between corporate credit cards and small business credit cards is the name on the card. A corporate credit card, on the other hand, will have the corporation name on the front. In the case of a small business credit card, your name is generally what is listed on the front of the card. In addition to the corporation name, it will usually have your name as well in order to verify that you are an authorized user. But, the primary name is the corporation name since financial responsibility falls back on the company.

This also helps the corporation track the expenses of each employee.