What is a Corporate Credit Card?

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.

How Does a Corporate Credit Card Work?

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.

What are the Key Features and Benefits of Corporate Credit Cards?

The common features of company credit cards for employees are listed below:

  • Corporate credit cards are only issued to larger, structured, and established companies.
  • They make it easier for employers and employees to manage company-related expenses.
  • The liability of paying the dues lies either with the employee, employer, or both.
  • Using a common platform, companies can control all aspects of the cards in real-time.

Benefits for Employees

Owning a corporate purchase card is beneficial for employees in the following ways:

  • The corporate rewards card covers your travel expenses while letting you avail VIP lounge access at domestic and international airports.
  • Some of the best corporate credit cards also provide travel insurance to help you travel worry-free.
  • No stress about paying for business expenses.
  • You can even benefit from the rewards’ programs offered on the corporate credit card.

Benefits for Employers

Employers too can enjoy several advantages on corporate charge cards:

  • Having a credit card for a corporate account makes it easy to manage expenses as there is no need to disburse cash for miscellaneous business transactions.
  • You can choose the spending categories when handing out a credit card for company use.
  •  You can even set a corporate credit card limit to control transactions.
  • You can also choose where the card can be used and limit the purchases to specific merchants, depending on type and location.

What are the Company Policies Associated with a Corporate Credit Card?

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.

Things to Remember When Using a Corporate Credit Card

  • Do not make unapproved transactions on a corporate credit card as it can put you in an uncomfortable situation with your company.
  • Ensure that you use the card for work-related expenses only so that you do not waste company funds.
  • Keep a track of your credit score as your company can ask for it to understand financial habits and standing.
  • Ensure that you clear your credit card dues on time to maintain the credit score.
  • Keep your credit card safe and report loss or theft immediately.

Frequently Asked Questions

  • ✔️How is a corporate credit card different from a business credit 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.

  • ✔️Is it easy to get a corporate credit card?

    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. 

  • ✔️Is personal credit score considered before approving a company 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.

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