With a personal guarantee on a credit card, you are personally responsible for all payments and resulting debts charged to that card. With a business card without a personal guarantee, you may be only partially or not at all liable for repaying the balance on which your business defaults.
Business cards without a personal guarantee are usually corporate cards, but some can also be business credit cards. The latter just do not allow you to transfer balance.
Because most business credit cards require a personal guarantee to open an account, there are only a handful of cards that won’t hold you fully liable if you miss a payment. Here are Bankrate’s experts’ top options for business cards without a personal guarantee.
Comparison of the best business cards without personal guarantee
| Card name | Card type | Best for | Bankrate Rating |
|---|---|---|---|
| SVB InnovatorCard* | Credit card | Fast-growing companies | N/A |
| Brex card | Credit card | Significant rewards | 5.0 |
| Ramp Corporate Card* | Credit card | Flat-rate premiums | N/A |
| Office Depot OfficeMax Business Loan Account* | Credit card | Carry a credit | N/A |
Top business cards without personal guarantee
How to choose a business card without a personal guarantee
Choosing a business card can be difficult. If you limit your choices to a card without a personal guarantee, you limit your options even more. The best way to choose is to know your monthly budget: determine how much money your business spends each month and how much you can afford. Balancing your expenses and income is important—especially if several of your options are credit cards.
- Evaluate your income and expenses: If you can’t afford to pay your bills every month, a charge card isn’t a good choice for you. Instead, you might want to opt for a traditional business credit card that requires a personal guarantee.
- Choose discounts: Several business cards offer perks and benefits for software and other business applications that help you get your daily tasks done. Choose a card with perks you’ll use.
- Don’t fixate on one function: While a card without a personal guarantee sounds nice, don’t romanticize it. If the cards without a personal guarantee don’t meet your needs, it may not be the right one for you.
How to minimize personal liability with a corporate credit card
Choosing a business card without a personal guarantee is the best way to minimize your personal liability for your business’s debts. However, if you are not eligible for such a card, the amount you will be liable for in the event of a default on a business card depends mainly on the type of personal liability clause you have agreed to:
- Limited liability: The issuer can collect a fixed dollar limit.
- Unlimited liability: The issuer can collect the entire amount due plus financing and legal costs.
If you’re looking for a new business credit card, choosing a card with a limited personal guarantee – rather than one with an unlimited guarantee – may provide you with some level of protection.
Of course, you can also minimize the amount you have to pay back by staying in control of your account. Avoid surprises by paying bills on time and in full, stopping all charges if you can’t pay the minimum required, and checking your account balance regularly.
Additionally, if you have employee cards linked to the account, review their fees. Many issuers allow primary cardholders to set lower fee limits or locks on employee cards. Taking advantage of these features when they’re available can help minimize unexpected liability exposure.
Frequently Asked Questions
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Unless you have a card that doesn’t require a personal guarantee, like the ones described above, the answer is yes. You are personally liable for any balance you accumulate on a business credit card. But even cards that don’t require a personal guarantee have requirements. Most require you to register your business as a corporation to qualify, or open a business bank account with funds that determine the limit of your credit limit, like the SVB Innovators Card.
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Most importantly, the lender cannot seize the business owner’s personal assets if the business fails to pay its bills.
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No, that’s part of the application process. If you apply for a business credit card with a personal guarantee – which is included with most business cards unless otherwise noted – you agree to be personally liable for payment by submitting the application.
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A lender will generally enforce a personal guarantee in the same way they would any other debt – they will ultimately take you to court.
The conclusion
When comparing business credit cards, options without a personal guarantee may be attractive if you don’t want to be personally liable for business debt. While the credit card company may be able to sue your business for unpaid credit card debt, your personal assets remain separate and protected.
However, there are several disadvantages. Business credit cards without a personal guarantee are usually not available to sole proprietors, and meeting the additional requirements (such as minimum account balances or sources of income) can be challenging. In general, few business cards are available without a personal guarantee, and they also often offer fewer perks and rewards than other business cards.
*All information about the SVB Innovators Card, Ramp Corporate Card and Office Depot OfficeMax The business credit account was collected independently of Bankrate and has not been reviewed or approved by the issuer.
