Corporate cards

Written by
Marissa Saini
Last Modified on
January 22, 2024

One of the first things you’ll need when your business grows is a better payment system. 

A set of corporate credit cards tends to be the logical choice for most businesses. But is this still the best option these days?

Let’s have a look at the characteristics of corporate cards and compare them with other types of company cards

What is a corporate card?

A corporate card is a credit card for business-related expenses. These expenses can range from business travel and dining to office supplies and utility bills.

Corporate cards give business owners and authorised employees more convenience and financial relief while keeping a close eye on spending. They typically have several partner programmes and benefits like free airline miles.

Corporate credit cards or business credit cards

Corporate credit cards are designed for companies with high annual revenues. Employees of such companies tend to travel extensively to maintain existing accounts and build new relationships. These companies spend a substantial monthly amount on developing the business. 

Companies must have a healthy business credit score to be eligible for a corporate credit card as the company, not the employee, is responsible for paying the bills. In other words, the company is liable for all debt. 

Not all companies have access to corporate credit cards. And not all companies need corporate cards. They may benefit from a more digital offer. More about that later. 

Business credit cards are the equivalent of corporate cards for smaller companies no matter their revenue, spending threshold and size. This includes sole proprietors and freelancers. 

To be eligible for a business credit card, business owners must have a healthy personal credit score and provide proof of business ownership. Business owners, not the team, will pay the bills. So in the case of business credit cards, business owners will be liable for all debt.

Corporate card benefits for employers

1. Increase spending visibility

Instead of petty cash, cheques and personal funds, the use of a corporate card gives the founding team or finance department central visibility on all transactions.

On top of that, it gives details related to each transaction for a more cohesive understanding of their business spending.

2. Set spending limits

Business owners can set limits on each card to keep spending in line with budgets. Spending limits decrease the chances of employees charging personal expenses on their corporate cards.

3.Maximise cash flow

Business owners can take up to 55 interest-free days to pay their monthly bills, therefore maximising cash flow for more urgent or essential purchases. Being savvy with bill management can help their business grow faster.

4. Save more

Most corporate cards reward spending by offering insurance, discounts, cashback and more to help you save on other business-related costs. Scrutinise the perks offered in reward programs to pick the right card for your business needs.

Corporate card benefits for employees

1. Financial relief

With a corporate card, employees don’t need to pay upfront for any business-related expenses, allowing them to make purchases without worry or delay.

2. Convenience in payment

Employees can connect their corporate cards to their digital wallets or Google/Apple Pay to facilitate in-store or online payments. It’s not only convenient, but it also eliminates the risk and hassle of dealing with lost or misplaced corporate cards.

3. Travel perks

More often than not, corporate cards are the key to airport lounges. Giving employees access to lounges is an excellent way to show them that you appreciate their contribution to your business.

How to get a good business credit score

Regardless of your credit card choice, a healthy business credit score reduces the barrier to secure loans and signals investors that it’s safe and lucrative to do business with your company. 

Three important habits to build and sustain a healthy business credit score:

1. Track your statements

Sift through each charge to verify its legitimacy. This will help you promptly spot faulty items and fraud and avoid tainting your credit score unnecessarily.

2. Pay early

Set up an auto-pay system to ensure that all your bills are settled ahead of time. Doing so will guarantee you’ll never need to pay late fees and provide you with a comfortable buffer to sort out any roadblocks. Early payment reflects well on your business operations as a whole and gives your credit score a boost.

3. Monitor credit card use

Set credit limits and track the spending of all employees with a credit card. This keeps expenses in line with your budgets and prevents unexpected charges.

Alternatives to corporate credit cards

Unless your employees travel extensively or can benefit from the other perks, corporate cards aren’t the best solution for your company. In the end, they’re still traditional company credit cards.

With prepaid cards or virtual company cards from a payment service provider like Aspire, however, you can enjoy many more benefits for your growing company. 

Think about automatic synchronisation with your accounting software, real-time overview of expenses and customisable spending limits. 

Find the rewards that work for you

Common corporate card perks include converting spending into airline miles, travel insurance and airport lounge access. 

If you have an extensive international team, this is an excellent investment. But if you’d rather have more modern software solutions and easy access for all employees, consider virtual company cards instead. 

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About the author
Marissa Saini
is a seasoned writer and an avid trendspotter across business finance, personal finance, travel and lifestyle industries. With writing history at SingSaver, INK, and ohmyhome, Marissa leverages her broad range of experiences to simplify finance and make readers financially savvy.
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