Business Credit vs. Personal Credit: What’s Better?


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The struggle of business credit vs. personal credit cards is the #1 thing slowing real estate investors down.

Especially in the beginning, it’s tempting to use personal credit cards to kickstart your investing adventures.

However, the use of personal credit cards on investment projects can ultimately cause significant harm to your dreams of building wealth.

The Risk of Personal Credit Cards

Using personal credit cards for the type of large-scale spending necessary in real estate investing drives up usage. 

Your credit score is calculated based on two factors: funds available and usage. High usage tanks your credit score fastA low score can significantly damage terms of loans and your overall ability to grow your investment business. 

A Better Alternative

In order to protect your credit score, consider switching your investment spending to a business credit card.

This separates your investment usage from that personal credit score. 

Additionally, since these cards don’t penalize high usage, you can run up the balance as long as you pay it off on time. In fact, consistently high usage and good payment history can even result in the bank raising your spending limits on that business card.

Getting a business credit card is easy, and with this simple change, your personal credit score is protected. If you have a good score, lenders can confidently offer better rates and terms which will save you a lot of money in the long run.

What to Look for in a Business Credit Card 

Here’s the good news: shopping for a business credit card isn’t all that different from looking for a personal one!

  • Look for 0% interest and benefits the same as you would on a personal card.
  • Make sure you know whether or not that card will report. To protect your credit score, you’ll want to find one that doesn’t.
  • Remember: You still need to pay your bills on time. Many business cards will start reporting if you have late or missed payments.


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