Corporate credit cards are often misconstrued as business credit cards but there is a stark difference between both. A business credit card can be availed by anyone who needs a separate banking account for their business needs. This could be for a small- or medium-scale business. Corporate credit cards, on the other hand, are only offered to large corporations, with annual revenue in millions, to keep business expenses separate from personal transactions.
Corporate credit cards are issued to registered corporations of prominence and are often referred to as company credit cards. To check eligibility for such cards, the issuing bank considers the company’s latest audited financial statements and tax-related information. So, when you apply for a credit card, the financial health of the company is in focus and not that of the owner’s.
Another important thing for employees to remember about company credit cards is that the liability against them may either be individual, corporate, or joint. In case your company card has an individual liability clause, you, as an employee, must pay the credit card bill when it’s generated and later claim a reimbursement. If the card comes with corporate liability, the company will be responsible for paying the credit card dues. Lastly, if the corporate credit card has a joint liability clause, then both, you and the corporation are liable to pay the bill. It’s notable that any default in bill payments in the case of joint liability has a direct impact on your own credit score.
The common features of company credit cards for employees are listed below:
Owning a corporate purchase card is beneficial for employees in the following ways:
Employers too can enjoy several advantages on corporate charge cards:
Every company has certain policies regarding the use of its corporate credit cards. It is very important for employees to familiarise themself with these policies. These may vary based on your designation or position in the organisation also. Some of the key things you should be aware of are the spending limits, payment liabilities, and restrictions. The limits can be separate for different categories as well as for different merchants. As you are likely to travel using a corporate credit card, you should also check the travel policies along with the dos and don’ts associated with your card.
A business credit card can be availed by anyone who needs a separate banking account for their business, whereas only large companies can avail corporate credit cards.
Lenders make the decision after checking the company’s most recent financials and tax filings. If the company has good financials, it is easy to get a corporate credit card.
When you apply for a corporate credit card, the financial health of the company is in focus and not that of the owner.