Though there are few differences between Business and Personal credit cards, there is one key difference that prospective and concurrent business credit cardholders should know: business credit cards cannot "chargeback" transactions in dispute.

What's a "Chargeback"?

A chargeback is the reimbursement or return of outbound funds to the consumer. This is initiated by the user's credit-issuer and is, more or less, the last line of defense against fraudulent charges, uncooperative merchants and items purchases whose quality or state was not as described or agreed upon.

The ability for personal credit cardholders to chargeback outbound funds came as a result of the Truth in Lending and Electronic Funds Transfer acts, both of which were designed to protect consumers from fraud, identity theft and merchant abuses. However, despite having chargeback available, initiating a chargeback can often require filling out a lengthy statement, after which the dispute is filtered into 4 "reason" categories: technical, clerical, quality and fraud. For technical, clerical and obvious fraud reasons, chargebacks are generally administered quickly and with little latency or dispute. However, for quality-based chargebacks, merchants can use their banks to counter a chargeback, which can often result in reimbursement delays or, in some cases, require mediation. In the event that a purchase is charged back, many credit issuers, including Visa and MasterCard, as well as payment service provider PayPal, levy fines against the merchant's bank and monitor merchant accounts for chargeback frequency.

Recourse for Business Credit Cardholders

Though business credit cardholders lack the ability to chargeback quality-related transactions, most of these cards offer other services to protect against abuses. These services include:

Purchase Protection

Purchase protection is fairly standard in all credit cards. With some cards, this includes extended warranty for applicable products purchased on the card. For most cards, however, this simply protects the cardholder against price depreciation, allowing them to collect the difference should a good's price decrease in a 90-day period.

Employee Misuse Insurance/Protection

One of the largest concerns for business credit cardholders is misuse and abuse by employees. In addition to monitoring employee spending, enabling proprietors to set limits for employees and monthly statements for each card, several credit card issuers offer insurance of varying amounts to cardholders to recoup costs in the event a current or former employee makes unauthorized or fraudulent charges on the account. As the personal credit of the proprietor is at stake with most business credit cards, this is an invaluable service and one that could potentially safeguard personal credit.


Despite being unable to initiate a chargeback, business credit cardholders are still entitled to the arbitration and mediation processes available to other credit cardholders. Though there is no certainty that the decision will be made in favor of the cardholder, this process does enable acquiring and issuing banks to participate in and decide upon an outcome using various statements, merchant and cardholder history that, with an excellent history with the credit issuing bank, often favor the cardholder.

Virtually all bank errors can be addressed and remedied without chargeback, just as with other credit card types.

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