{"id":5826,"date":"2022-02-07T15:21:05","date_gmt":"2022-02-07T09:51:05","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=5826"},"modified":"2023-05-06T13:50:42","modified_gmt":"2023-05-06T08:20:42","slug":"personal-credit-card-for-your-business-needs","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/business-banking\/personal-credit-card-for-your-business-needs\/","title":{"rendered":"Should You Use Your Personal Credit Card for Your Business Needs?"},"content":{"rendered":"

The Central Bank of India launched the first bank credit card<\/a> in 1980. Since then, there has been a significant increase in the number of personal credit cards throughout the country. The ease of use and universal adoption makes them the most widely used financial instrument.\u00a0<\/span><\/p>\n

However, if you run a business, it is advisable to get a corporate card<\/a> and separate your personal and business expenses. Read on to find out why.<\/span><\/p>\n

What is a corporate credit card?<\/span><\/h2>\n

A corporate credit card is a type of credit card issued by a bank to a business. The business owner can choose to extend the card to their employees as well to help create a seamless reimbursement experience. This way, they don\u2019t have to use their personal funds to pay for business-related expenditures and then, go through with the reimbursement process.\u00a0<\/span><\/p>\n

Corporate cards increase the company\u2019s purchase power while improving the cash conversion cycle with short-term credit at no cost (zero interest).\u00a0<\/span><\/p>\n

Why should you use a corporate credit card for your business?<\/span><\/h2>\n

1. Credit limit<\/span><\/h3>\n

Corporate credit cards have a much higher limit on the funds you can access when compared to personal cards or business credit cards. This is because the credit limit of corporate cards is determined based on your company’s profile and income. They tend to have dynamic credit limits, depending on your business\u2019 growth. This is a great benefit because as your requirements grow, your credit limit becomes higher. On the other hand, the credit limit of your personal credit cards is determined based on your income and risk profile. Therefore, it is a great idea to bifurcate your business and personal expenses.\u00a0<\/span><\/p>\n

Get a RazorpayX Corporate Card<\/a><\/p>\n

2. Credit score<\/span><\/h3>\n

A corporate credit card helps build your company\u2019s credit score. This helps you get cheaper capital in the future. This is an easy and risk-free way to increase your company\u2019s credit score.<\/span><\/p>\n

3. Liability<\/span><\/h3>\n

Every business owner understands that business transactions can get tricky, mainly due to the high transaction value involved. Later, when such a situation arises \u2013 using your personal credit card risks your personal credit limit. However, a corporate credit card has no liabilities on the individual.<\/span><\/p>\n

4. Tax benefit<\/span><\/h3>\n

You can claim all the business expenses paid from a corporate credit card in your profit and loss account. Whereas, personal card users have to audit their statements closely to separate business charges from personal charges. Without much effort, you will be able to claim accurate business expenses and reduce your tax liability.\u00a0<\/span><\/p>\n

5. Expense management<\/span><\/h3>\n

As a business, you have complete control and visibility over your business expenses. You can set an upper limit on funds that can be used by your employee. This helps you manage your expenses really well. And, you don\u2019t have to worry about making reimbursements to your employee later on.\u00a0<\/span><\/p>\n

Get a RazorpayX Corporate Card<\/a><\/p>\n

6. Business-specific bonuses and rewards<\/span><\/h3>\n

Personal credit cards have personal rewards specific to an individual, such as discounts on shopping, dining and grocery purchases. However, business credit cards offer rewards and discounts on airlines, airport lounge access, hotel bookings, business services, etc, which are specific to your business.\u00a0<\/span><\/p>\n

7. Business Credit History<\/span><\/h3>\n

Business credit history is crucial if you apply for specific business loans or machinery and equipment leases. If you use a personal credit card for meeting your business expenses, it is counted as a personal expense and not a business expense. Therefore, it does not help create a business credit history.\u00a0<\/span><\/p>\n

8. Fraudulent purchases<\/span><\/h3>\n

You get greater visibility of expenses made by your employee when they use a corporate credit card. This helps the audit and finance teams to spot fraudulent purchases and non-business expenses better. Any expense or refund will occur on the same card, which means there\u2019s no room for misuse.\u00a0<\/span><\/p>\n

Choose a RazorpayX Corporate Card<\/span><\/h2>\n

RazorpayX, an end-to-end business banking platform, has the best in class corporate cards for your business. You can avail an instantly approved card that offers simplified payments and superior expense management exclusively for Razorpay users.\u00a0 Here are a few reasons why you must choose RazorpayX Corporate Cards.\u00a0<\/span><\/p>\n