Both a business line of credit and a business credit card provide revolving access to capital — but they serve distinctly different purposes.
Business Credit Card Basics
Works exactly like a personal credit card. You have a limit, make purchases, receive a monthly statement, and can pay in full or carry a balance (typically 18–28% APR). Excellent for everyday business expenses: travel, supplies, subscriptions. Many cards offer strong rewards programs.
Business Line of Credit Basics
A cash facility. You draw actual dollars into your bank account — giving you the flexibility to pay anything, including expenses that don't accept credit cards: payroll, rent, supplier invoices requiring ACH or check. Typically offers higher limits and lower rates than credit cards for equivalent business profiles.
Key Differences
Access: Credit cards are for purchases. Lines of credit provide cash.
Limits: Lines of credit offer larger limits ($10K–$500K vs. typical card limits of $5K–$50K).
Cost: Lines of credit have lower rates for larger amounts.
Rewards: Credit cards offer rewards; lines of credit typically do not.
The Best Strategy: Use Both
Use a business credit card for everyday purchases to earn rewards and track expenses. Maintain a line of credit for larger cash flow needs and emergencies. Pay the credit card in full every month to avoid interest while maximizing rewards. Establish both before you need them.