Corporate Credit Card: Definition, How It Works, Types, and Benefits

Once a corporate credit card is issued, both the company’s name and the employee’s name will appear on the card. Each employee typically gets their own individual credit card number, even though expenses roll up to a single corporate account. Since many employees might be issued a corporate credit card, businesses typically create guidelines for authorized expenses.

1. Before an employee uses a corporate credit card for the first time, they should find out who is responsible for paying the bill each month.
2. If your business is an LLC, S-Corp or C-Corp with a solid business credit score and revenue in the millions, your company might be eligible for a corporate credit card.
3. Earnings credit rates are paid on the deposits a company holds with a bank, and larger deposit balances help to lower bank fees.
4. This means that if the company goes under without having paid its bills – during an unforeseen economic crisis, for example – the business owner is not held responsible.
5. A business technology writer and researcher whoe work focuses on financial services and cross-cultural diversity and inclusion.

Card Type

Still, many larger companies allow employees to reap the benefits of rewards programs, as doing so can improve employee morale. Employees receive individual bills and are responsible for directly paying the card issuer for any charges, all while filing an expense report to get reimbursement from their employer. The card issuer will likely check each employee’s credit before providing them a credit card, but it’s a soft credit pull so their credit score likely won’t be affected. Companies that make corporate cards available to employees typically have a written policy—or an entire manual—regarding their proper use. Employees should try to follow these rules from the get-go to avoid making mistakes that could lead to accounting nightmares or worse. This means familiarizing themselves with the company’s general spending and reporting requirements and finding out if there are any spending limits that apply to certain categories.

How to Apply for Kotak Corporate Credit Card?

With every rupee you spend, you earn reward points and cash rebates that you can redeem towards air miles, lounge access, and more. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. Within 20 days of joining, you will receive the reward points in your account. Learn how the food manufacturing giant achieved better cash management with J.P. Serving the world’s largest corporate clients and institutional investors, we support the entire investment cycle with market-leading research, analytics, execution and investor services.

Establish policies for all cardholders

While corporate credit cards are designed for corporations with multiple employees and revenue in the millions, business credit cards are designed to meet the needs of small business owners, including freelancers and those with side hustles. Knowing which option is best for your business will help you apply for the right card — and having the right line of credit is a great way to help your business grow. While they provide typical credit card benefits, corporate credit cards are designed to meet the needs of companies that desire more full-bodied, customizable financial tools to track and control employee spending. Corporate credit cards are cards that let employees pay for authorized business expenses while offering features that make it easier for companies to manage and track finances.

Learn About Reward Programs

Before an employee uses a corporate credit card for the first time, they should find out who is responsible for paying the bill each month. If they are responsible, they may want to set up a system to ensure that their payments are on time (such as email alerts) and that they have the funds on hand to cover the balance until they are reimbursed. They can simply use the corporate credit card to incur their business costs, and their companies will handle the rest.

Unlike consumer credit cards, corporate credit cards often have lengthy application processes, including documentation of a business’ income and expenses. If it’s a corporate liability card, the employer pays the bill (although the employee may be on the hook for any unauthorized or personal expenses). Corporate credit cards are credit cards issued to employees of established companies that let them charge business expenses—such as hotel stays and plane tickets—without having to use their own cards or cash. These cards, which are also known as “commercial credit cards,” can make it easier for employees (and employers) to manage expenses, and many offer perks such as frequent flier miles and access to airport lounges. When you start to see your company shift from a small startup to an established corporation, it’s time to think about transitioning your financial tools. Corporate credit cards are a highly customizable way for businesses to streamline the tracking and management of employee expenses, while providing employees with controlled financial flexibility and common credit card perks.

When you choose to apply (and are approved) for a new credit card through our site, we may receive compensation from our partners, and this may impact how or where these products appear. Please view our advertising policy and product review methodology for more information. Depending on the type of corporate credit card, either the employee or the employer may be responsible for paying the credit card bill. As a result of using the corporate credit card, the company receives benefits such as access to the airport lounges, complimentary meals, and dining discounts.

Airline miles or hotel points might be most useful for a company that has teams of employees who travel the world frequently to fulfill their mission for customers. Examples of this might be a company with large sales or strategic consulting teams. The airline miles or hotel points could be pooled by the company to offset expenses related to end of year awards ceremonies or annual team-building retreats. For example, payables to a single vendor can be viewed across aggregated individual employee cardholder accounts to pinpoint abnormal payments made to a new or infrequently paid vendor.

Corporate credit card programs are especially useful for helping what is corporate credit card a company build long-term value. But the biggest benefit to a corporate credit card is that individual employees can be issued their own cards to handle their work-specific business expenses. Corporate credit card users—most often large organizations including corporations—must meet criteria set by their card’s provider, which include an annual revenue threshold and minimum level of spending, as well as a demonstrated financial track record. Smaller companies that don’t fit the criteria for a corporate credit card may still find a business credit card that suits their needs. To find out whether your business will qualify for a corporate credit card, contact a corporate credit card issuer directly.

Enhanced Payables Process

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It also provides the incentive of being accepted universally by over a million merchants. Just as a normal consumer might use their favorite airline, hotel or cash-back credit card for every day to make purchases with their local grocery store, gasoline station and mobile phone carrier, large companies have similar expenses. However, the biggest challenge for these companies is gathering and analyzing payables and expenditure information from multiple regions with disparate financial accounting systems to figure out which option is the best for their expenses.

If you have any questions about how your corporate credit card should be used, talk to your manager or reach out to a team member in accounting or finance. Corporate credit card issuers might also look at a company’s business credit score, recent audited financial statements, tax info, and more. Companies should develop comprehensive policies and procedures governing the use of corporate credit cards. These guidelines should outline acceptable spending categories, spending limits, documentation requirements, and procedures for reporting lost or stolen cards. Also, individual account controls can be used to oversee corporate credit card spending by limiting the maximum amount, frequency and geographic location of purchases made by the employee cardholder. Sometimes, additional controls can be implemented to provide a secondary approval for a corporate credit card charge that might be above a certain threshold value or made to a vendor that is foreign to the company.