Things You Need to Know About Personal & Business Credit Cards

Things You Need to Know About Personal & Business Credit Cards

In today's modern era, a slim-shaped rectangular piece of metal has been a daily prospect of man's life. 

Right from the early hours in the morning to midnight movements, the usage of bank cards is a part of daily life. 

In the market, there are various kinds of cards serving different purposes. Through all these, most of us are familiar with credit cards. Well, what exactly are these credit cards? 

A credit card provides instant loans with a high limit range. You can avail your limited money and pay for it later. 

Although you need to pay it interest, many people prefer the credit way. The money-borrowing procedure is easy and fast. 

All the peeps mostly prefer credit cards on a daily basis. These credit cards also vary in many options. 

Today we will talk about personal credit cards and business cards. Many of us are very familiar with these two specifications. 

What are their purposes and uses in everyday life? Everything you need to know about personal credit cards and business credit cards.

What is a personal credit card?

  • This is a one-consumer card that is for personal use. This card avails loans up to an extent. 
  • You can borrow money from this as a form of loan for everyday services and goods consumption. 
  • You can avail of loans for a mortgage and other services as well.
  • You will have to pay the borrowed money before the given time with interest.
  • If you fail to pay back the loan, you will have to pay an extra penalty money.
  • This penalty is considered under late payment with interest as well.

What is a business credit card?

  • This card is used for business purposes rather than personal use.
  • Mostly these cards are used under business profiles and payments.
  • This acts as a record of transactions for small business organizations.
  • You can avail of big loans under this card.
  • It has many other special offers.
  • The interest rates are more than the personal credit card.

How can you apply for a credit card?

Applying for a credit card is an easy process. With the required official documents, you can get your credit cards within no time. 

There are a few easy steps to follow in order to get your credit card.

  • Get your credit score. 

Credit score includes your entire history of past and present loans, debts, payments, and transactions.

Different cards have different credit scores to reach minimal maintenance standards. 

  • Select which type of card

After you calculate your credit card score, you will get to know which type of card you need. You have two options under this,

Student cards: These cards have a low credit score. Some student cards don't even need a credit card score. This requires a specific amount of security deposit.

Unsecured reward cards: These cards have moderate to high credit scores. It also has special offers regarding a few services in retail, travel etc.

  • Complete required documentation

Now you will have to provide the required documentation to avail of the selected credit card.

  • Financial documentation: includes the income proofs.
  • ID proof: this is about providing substantial ID proofs.
  • Age proof: includes documents for date of birth proofs.

Go through the terms and conditions.

  • Under this section, every service offering credit cards has certain terms and conditions to be followed.
  • Carefully read the policies and terms. Once you get enough clarity regarding the entire process, move forward and complete your credit card process.
  • This section is to be read with utmost diligence to avoid future complications.

After following these steps, you will be able to get your credit card and start using it as well for everyday services.

Who is eligible for a personal credit card?

Any individual with a good credit score is eligible to have a personal credit card. You have to make sure that the interest doesn't increase. 

Hence you will have to pay your loans within the given time to avoid penalties.

Who is eligible for a business credit card?

This is not an individual card for personal use. This is to maintain specified and organized data of transactions and payments of a business. 

Any business holder, whether small or large, is eligible to use this credit card. Since this has a higher interest rate, you must be more up-to-date to round off the loans taken.

Features of a personal credit card

  • You will get credit points on shopping for different stores
  • You can avail of these points when they reach a good number.
  • It is used for personalized payments. This helps in no other interactions.
  • When your credit score increases, you will be able to attain offers.
  • And with membership insurance, you can get special opportunities as well.

Features of a business credit card

  • You can get year-end summaries to analyze and track expenses easily.
  • Extra perks are available under this card, like travel perks, free check-ins, and internet and mobile services.
  • Cashback offers
  • Payment refund on vendor services
  • Tax deduction for receipts stored for over 7 years 

Uses of a personal credit card

A personalized credit card has multiple uses in day-to-day life.

  • for shopping clothes
  • for paying for everyday groceries
  • for services payment
  • to consume goods
  • to travel and explore
  • to spend on any other personal use
  • to apply for personal loans

Uses of a business credit card

A business credit card contributes to many services regarding the established organization.

  • to spend on the business development
  • to pay the vendors
  • to track the expenses
  • to buy goods for the business
  • to get large amounts of loans
  • to avail of a mortgage

Benefits of the credit cards

  • Tracking of expenses

You can easily track all your expenses and transactions of payments. The history of these payments helps you understand your expenditure graph, including profits and losses.

  • Fraud protection

Unlike paper money, digital cash can be restricted if the credit card is gone or stolen. This helps in saving money beforehand.

  • Digital payment

You can link your credit card details with mobile payment applications and go wallet free with digital cash.

  • Easy mode of payment

The payment is done easily within seconds without having to search for cash for a long time. The payment will be precise and simple.

  • Easy to carry around

This metal card is easy to carry around. It is also easy to protect and secure oneself.

  • Extra beneficiary features and discounts

Under the credit card features, many offers are valid, and discounts are provided for many services and the consumption of goods.

Differences between personal and small business credit cards

Even though both personal credit cards and business cards are from the same category, a few aspects differentiate them from one another.

  • Credit policies

The policies and terms differ in both the cases of personal credit cards and business credit cards.

Business credit cards have more sets of rules and regulations to follow.

  • Card limits

The credit card limit for a personal credit card is less when compared to a small business credit card.

This is based on the credit score of the particular cards.

  • Rewards and cashbacks

The rewards and cashback offers provided will be different. The small business cards will have more beneficiary rewards and cashback offers. Personal credit cards have minimal offers. To get more, you have to avail yourself of certain memberships.

  • Tax benefits

Business cards have tax deduction offers, while personal credit cards do not have any.

  • Consumer protection

Under consumer protection laws, small business does not have secure consumer protection. Most personal cards are also not secured but, under a few circumstances, have consumer protection.

  • Interest rates

The interesting change with both of the credit cards. In the case of personal cards, the interest is less, while the business cards interest is high.

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To conclude, a simple metal card has a deep connection to the everyday financial development of people as individuals and as a whole community.

A little card with a big process and functioning provides you with many systematic approaches. 

The two cards differ from each in terms, but they serve the same purpose. In a nutshell, credit cards have been an easy process to get any service with extra perks in return. 

It is a whole payment propaganda with new regulations that are always profiting. Easy to gain, tough to maintain, these are a way of living now.

FAQ’s related to Personal & business credit cards

1. Can I use my personal credit card for business use?

Using a personal credit card for business expenses is possible but has complications.

  • Hard to track expenses

It will take a lot of work to track expenses regarding the business payment history. This can create an unfulfilled tracking of expenses.

  • Legal protection

There will be no legal protection or secure terms, which may lead to problematic situations and an unstable business structure.

  • No credit history

The credit will differ for both credit cards. The credit history will come under personal, and it will be a problem when you want to apply for a large amount of loan.

  • No rewards and cashbacks

Business credit cards have beneficiary rewards and cashbacks when compared to personal credit cards. You won’t be getting any of these special perks.

  • It can be confusing and clumsy.

The entire transaction will include both personal and business credit card history which can be confusing to understand.

In regard to all these challenges, personal credit cards are not    recommended to use for business expenses.

2. What are the different ways to apply for a credit card?

A few basic options exist to apply for a credit card.

  • Online method: You can visit the website of the preferred organization and avail of the credit card by submitting the required documents.
  • Telephone:  You can call the organization and provide the information needed.
  • In-person: You can go in person to the organization and get the credit by following the steps mentioned earlier.

3. I don’t have a credit score. Am I eligible to get any credit card?

Yes, you can apply for a credit card if you don't have a credit score. 

  • Opening a secured credit card: You can open a secured credit card. The money that will be posed as a deposit will be borrowed and repaid later on with certain terms.

Getting the deposit by an authorized user: An authorized user, such as a parent or spouse, can deposit the money under the credit card account. The credit scores of these authorized users should be non-problematic to further complications.

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