Nowadays, every growing company has some business expenses, and a simple way to control them is to issue corporate credit cards to its employees. Moreover, these cards can prevent employees from using their own money if they use it efficiently and intelligently. Therefore, a corporate card can be one of the essential catalysts for a company’s profit and growth. Most importantly, companies can now easily open corporate accounts and issue credit cards for their employees by negotiating with a card issuing company or a bank.
A corporate credit card has some unique features like a personal credit card. For example, it usually covers all the costs that an employee incurs during business travel. Therefore, it lets the employees’ private funds remain untouched though the company can easily access and track card statements at any time.
Types Of Corporate Credit Cards:
One of the essential categories of corporate cards is the individual liability card. In this case, the cardholding employee is solely responsible for the payment of charges and also for reporting those business expenses to the company for quick reimbursement. Here, the personal credit score plays a significant role for the employee to get the card issuance, though it will not directly affect the card usage.
Another category of credit cards is corporate liability cards. In this case, an employee reports the total bills to his employer, and the company is responsible for the complete payment. It is easy for an employer to reconcile the card statements, but the card issuing company still checks the company’s credit score before approving any corporate card.
Various Criteria To Apply For A Corporate Credit Card:
- A company should have some successful annual credit transactions, and a minimum of fifteen card users should be available in the company to apply for a new card.
- They must have been in the business for more than one year and not hold the sole proprietorship.
- The employer has to submit their federal tax ID and all the information about the organizational structure to process the application.
- Additionally, it is essential to submit audited financial statements, the company’s credit history, and credit score to the bank.
- They also need to submit the contact details of the company’s representative, including the company’s president and treasurer.
Benefits Of Holding A Corporate Credit Card:
Corporate credit cards can effectively support a company in meeting its business objectives, and at the same time, it exposes the company to certain risks. Below are some of the advantages of using it:
- Expense management is one of the most common benefits of holding a corporate credit card. It allows the company to pay for the whole business expenses of their employees.
- Nowadays, it is very straightforward to control credit card expenses as employers directly handle accounts and transactions. Therefore, companies can set practical limitations for business expenses without any hassles.
- The reconciliation of card statements has become more quick and convenient. So now, the company does not have to ask for credit card statements from the employees.
- Short accounting or auditing processes can detect and reduces any credit card fraud. Therefore, employees need to worry about safety and security.
Many corporate credit card issuers offer their users various perks, including travel emergency services, quick replacement of stolen or lost cards, airport lounge access, and more. In addition, the expense reporting process has become less stressful because it offers electronic facilities to accelerate the process of submitting reports.