In the process of trying to grow their businesses, savvy entrepreneurs have learned it helps to build a strong business credit profile. Good business credit scores can make it easier to qualify for certain types of financing and can help open the doors to opportunities like government contracting or working with large retailers.
But figuring out how to build business credit can be confusing. Some types of accounts show up on business credit reports and some don’t, making the process feel hit-or-miss at times.
Unfortunately, one popular piece of plastic — the business debit card — doesn’t help at all. Unlike credit cards, debit cards don’t extend credit. They are simply a payment tool, and therefore don’t impact credit reports or scores, whether business or personal.
And that’s just one thing you need to understand about these cards. The other is that no federal law limits liability on business debit cards. In other words, if they are used by someone fraudulently, there is no law requiring the financial institution reimburse the cardholder. (However, most issuers are governed by zero liability policies instituted by companies like MasterCard and Visa. You can learn more about debit card liability here.)
What’s the Alternative?
So business debit cards don’t build credit and there’s no federal law limiting liability in the case of fraudulent use. Given these two strikes against them, what is the alternative? And what choice does a business owner who wants to avoid debt have?
A business credit card may be a smarter choice for your business. These cards are almost always reported to at least one commercial credit agency (some report to more than one) and they also are covered by federal law that limits liability in the case of fraudulent use to just $50 in most cases. (Issuers generally waive that $50 deductible.)
Even better, credit cards often offer rich rewards, and can be an inexpensive or moderately priced source of fast financing, depending on the interest rate. There are even business credit cards for start ups, which means you don’t have to wait until your business is established to qualify.
This article was published on May 19, 2025.
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Gerri Detweiler
Education Consultant, Nav
Gerri Detweiler has spent more than 30 years helping people make sense of credit and financing, with a special focus on helping small business owners. As an Education Consultant for Nav, she guides entrepreneurs in building strong business credit and understanding how it can open doors for growth.
Gerri has answered thousands of credit questions online, written or coauthored six books — including Finance Your Own Business: Get on the Financing Fast Track — and has been interviewed in thousands of media stories as a trusted credit expert. Through her widely syndicated articles, webinars for organizations like SCORE and Small Business Development Centers, as well as educational videos, she makes complex financial topics clear and practical, empowering business owners to take control of their credit and grow healthier companies.