Corporate and Small Business Credit Cards Compared
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. When it comes to business credit cards, the largest percentage of the market is small business owners.
In fact, small businesses are the driving force behind the American economy and create the most new jobs every year. 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.
Where You Find It
One major difference between corporate credit cards and small business credit cards is how you found out about it in the first place. 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. Corporate credit cards are not advertised in the mass media because they are set up differently, operate differently, and target a different group of people.
Customizing
When it comes to small business credit cards, you have to take what you can find. 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.
When it comes to corporate credit cards, the business can request options to be custom-made to work with the company. The reason for this increased flexibility comes down to revenue. A corporation placing millions of dollars of transactions on the credit card can have more say in how the card is set up. This ability to customize is another reason why you generally don't see corporate business credit cards being advertised within the mass media.
Of course, corporations generally have greater needs when it comes to their financial responsibilities than a small business owner. 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.
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.
Payment Responsibility
Another major difference between corporate credit cards and small business credit cards is the matter of who is responsible for repaying the debt.
As a small business owner with a sole proprietorship, you and the business are one and the same. This means you are personally responsible for repaying any debt that may have incurred. If you default on payments, it is your personal credit history that is hurt.
A corporation, on the other hand, is separate from the owner. Therefore, the corporation is responsible for repaying the debt. As such, the corporation may default on the credit card loan and file for bankruptcy, but you do not personally file.
It's in the Name
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. In the case of a small business credit card, your name is generally what is listed on the front of the card. A corporate credit card, on the other hand, will have the corporation name on the front. In addition to the corporation name, it will usually have your name as well in order to verify that you are an authorized user. This also helps the corporation track the expenses of each employee. But, the primary name is the corporation name since financial responsibility falls back on the company.
Student Credit Cards and Credit History
When a student applies for a credit card, oftentimes it is parents that object. Worries about being hit with a huge amount of debt is a valid point, but unfounded.
Quite frankly, few credit card providers will extend a huge credit line to your student, unless of course you co-sign the card! Then again, you can ask them to cap their credit line to give to you the protection that you and your adult child will need. One area that a student credit card can impact is credit history. Read on and weâ ll explore the reasons why getting a student credit card now can help your student later on.
Most parents worry that their children will buy a whole bunch of nonessential stuff with their credit cards. Well, if they get the card in their name, then that can happen. Just donâ t bail them out of their troubles as they need to learn to stand on their own two feet. On the other hand, a student credit card can pay for tuition, books, clothing, dorm room essentials, and many of lifeâ s little and big emergencies. The peace of mind that plastic can give should outweigh any fears that you have of not being able to afford a student credit card.
Moreover, a student credit card can provide one huge benefit: It is a fact: If your child managed a Visa, Discover, American Express, or MasterCard properly while in college, then that good news will become part of his or her credit report. Think about this: Their interest rate will be lower, resulting in big savings over the course of the loan.
You don’t want your student to have too much credit but a student credit card along with student loans is sufficient. Your child wonâ t have to pay back their student loan until at least 6 months after graduation, but the credit card will come into play right away. Show responsibility with the credit card and creditors will reward your son or daughter with a fantastic credit score: something that every consumer desires!