Personal Vs. Small Business Vs. Corporate Credit Cards

by : Bryan Pringle

I'm sure that anyone who has been on the planet for at least eighteen years, has received an offer to apply for a credit card. Television advertisements, internet advertisements, and credit card applications sent through the mail, are a constant reminder of just how embedded our society has become with the use of credit. I personally don't know any adult who doesn't have at least one active credit card. Not to mention the numerous car loans, home loans, personal loans, and business loans, that are all available to consumers. Let's take a look at three different types of credit cards.

First, let's take a look at the personal credit card. There are many different companies that offer personal credit cards. The rates usually range from nine to twenty percent. Many companies these days, are now offering zero percent balance transfers. This ranges from the life of the credit card balance transferred, down to a few months, or maybe even two years. Many credit card companies will offer low introductory rates, and then raise the rate after a certain period of time. What many consumers don't know about personal credit cards, is that many times, the credit card company will give a low introductory rate, and then raise the rate, if a customer's credit score changes. This is a very common practice, so one must read over the terms of the personal credit card very carefully.

Second, let's take a look at the small business credit card. The rates are usually higher than the personal lines of credit, due to the substantially higher credit limits. These rates usually range from twelve to twenty-five percent. The small business credit card also has limits that are substantially higher than the personal lines of credit. The limits usually range anywhere from fifty thousand dollars, up to several hundred thousand dollars. This type of card also allows for balance transfers, but makes it substantially more difficult to transfer larger balances. These cards have a more flexible cash advance feature, and a less stringent repayment policy. Many small business cards can allow the business to pay not just monthly, but also bi-monthly, or even quarterly. This can be a tremendous advantage to the small business owner, who usually operates as a sole proprietorship or a partnership. The credit limits are usually based on the personal credit scores of the owners and the amount of income that the business generates yearly, or quarterly.

The third type of credit card that we will take a look at, is the corporate credit card. These type of credit cards are extremely difficult to obtain. One of the reasons, is that the corporation has to establish a long credit history. This means that the corporation has to take out loans, credit accounts, and maintain a good credit history for a longer period of time, unlike individuals or small businesses. Another reason that it is difficult to get a corporate credit card, is that the corporation has to have a substantial amount of assets, and be profitable for anywhere from two to five years, before applying for the line of credit.

The limits on corporate credit accounts are anywhere from fifty thousand dollars to the infinite millions of dollars. As the corporation expands, the credit card company will usually raise the limits. This type of card also allows for balance transfers, but makes it substantially more difficult to transfer larger balances. The repayment terms are very similar to the small business credit card account holder. The payments aren't necessarily monthly, but may be bi-monthly and sometimes quarterly. The interest rates can be substantially higher than the small business, or personal lines of credit, but this is due to the high credit limits. The interest rates range anywhere from twelve to twenty-nine percent. Some credit card companies have even been known to charge flat rates on credit lines to corporations. This usually occurs when a very large corporation wants to borrow a substantial amount of money against its line of credit.

So there you have it. Personal credit cards usually have lower limits and lower interest rates, and are paid monthly. This is in contrast to small business and corporate cards, which usually have higher limits with higher interest rates, and can be payed bi-monthly or even quarterly.