Having a number of open credit cards with various amounts charged on each can adversely affect your credit, especially if the amounts charged on the cards are near the credit limit. However, sometimes the amount of credit cards you are forced to have is beyond your control. If you own or work for a business, you may need to keep business credit cards in your name to pay for business expenses. Although some business credit cards will show up on your personal credit report, others do not, and there are steps you can take to reduce the likelihood of your personal credit being affected by your business credit card use.
Types of Business Credit Cards
Although there are numerous business credit cards that offer different benefits, such as longer time to pay, limited fees or higher credit limits, there are only two primary types of business cards. First, there are business credit cards that you use for a business that you own or co-own. Generally, the bank considers your personal credit when approving you for these types of cards. Second, there are business credit cards that your employer owns but that you can use to make purchases. The type of business card you use plays a significant role in determining whether the card's activity is reflected on your credit report.
Business Credit Card Policies
According to Fox Business, most business credit cards will not show up on your personal credit report, even if they are for a business that you own and the bank evaluated your personal creditworthiness before offering them. For example, the website notes that Chase, Capital One and American Express all offer business cards that will not show up on your personal credit report. However, policies vary from business to business and card to card. If you want to ensure the card does not show up on your personal credit report, you need to carefully review the card and bank's policies.
Late Business Credit Cards or Cards With High Balances
If you use them for a business that you own, credit cards are likely to show up on your personal credit report if you don't make payments on time or if the amounts charged on the cards are more than half your available credit line. The late or charged up cards likely will show up on your personal credit report regardless of why they are late or why you have a high balance. For example, if you pay a card late because you are disputing a charge, it will still show up as a late payment on your credit report.
Employer Credit Cards
If your employer gives you a business credit card that simply names you as an authorized user, that card probably will not go on your credit report because you do not own the card. The company owns the card and the debt; you simply have permission to use the card. This is similar to the situation that occurs when you give a copy of a credit card in your name to a spouse or your child. You are liable for the debt charged on the card, but the spouse or child can use the card to make purchases. Fortunately, if your employer goes bankrupt, does not make payments on time or accrues a high balance on the cards, this information will probably not appear on your credit report.
- Fox Business: Keeping Business Credit off of Your Personal Record
- NerdWallet: Q&A: What Business Credit Cards Don’t Affect Your Personal Credit Score?
- Consumer Financial Protection Bureau. "CARD Act Report." Accessed Feb. 19, 2020.
- Capital One. "Spark Cash." Accessed Feb. 19, 2020.
- Chase. "Pricing & Terms." Accessed Feb. 19, 2020.
- Wells Fargo. "Wells Fargo Business Platinum Credit Card." Accessed Feb. 19, 2020.
Miranda Morley is an educator, business consultant and owner of a copywriting/social-media management company. Her work has been featured in the "Boston Literary Magazine," "Subversify Magazine" and "American Builder's Quarterly." Morley has a B.A. in English, political science and international relations. She is completing her M.A. in rhetoric and composition from Purdue University Calumet.