Finally, your startup is maturing into a well-established corporation, and it’s time to think about upgrading your financial tools. One of the many tools you need is a corporate credit card, but before you begin the time-consuming process of applying for a corporate credit card, consider whether a corporate card is truly the best option for your company.
What are corporate credit cards exactly?
Corporate credit cards are meant for companies with a substantial number of employees and high annual revenue, with a minimum of $4 million. In addition, these cards are designed for many authorized users and do not require an employee’s personal guarantee, which means that if the company fails, no single individual is responsible for the debt; instead, it is on the business itself.
Corporate credit cards offer businesses a convenient way to cover the costs associated with covering the expenses of their employees. Payments made through them are recorded on the company’s credit card statements. Businesses can set restrictions and limitations to keep business card costs in check. For example, they can impose strict rules prohibiting cards used for personal expenses and unauthorized card use.
Corporate credit cards, as opposed to standard business cards, are tailored to businesses of all sizes that want more robust tools to manage their finances. While standard credit card benefits are provided, corporate credit cards are designed to meet the needs of businesses that want more powerful, customizable financial tools to track and control employee spending.
The name of the business and the employee will appear on the corporate credit card once it has been issued. Although expenses accumulate in a single corporate account, employees typically receive their unique credit card numbers. Due to the possibility of issuing corporate credit cards to many employees, businesses frequently establish policies for approved expenses. As a result, corporate credit card policies can be highly personalized. For example, companies may impose restrictions on the amount cardholders spend in a single transaction or the types of merchants from which they may purchase.
What are the perks of having corporate credit cards?
With corporate cards, employers can better manage their business expenses. For example, employees used to have to pay for all business-related travel expenses out of pocket or with personal credit cards. The entire process took a lot of time, was laborious, prone to mistakes, and required multiple receipts to be kept on hand.
Corporate credit cards can be used to build program-level, and individual account controls to monitor employee purchases. For example, a corporate credit card programme for travel and entertainment can be managed with controls that restrict use to hotels and motels, airline and train ticketing, dining establishments, rental car agencies, and so on.
Every business owner knows that business transactions can be intricate due to the high transaction value. When a situation like this arises, using your personal credit card puts your personal credit limit at risk. On the other hand, a corporate credit card carries no personal liability, which eases the employee’s mind and increases productivity.