What is a corporate credit card? In the business world, corporate cards are distinct from small business credit cards and personal credit cards. The definition of corporate card is a card that is normally provided by companies to their employees to use for authorized expenses that are related to the business.
Businesses can give their employees corporate cards to use. The cards may have the individual employees’ names on them. The employees can then pay for business-related expenses on the cards. In many cases, these types of cards are used to pay for travel and entertainment expenses.
Corporate cards are issued to the companies themselves instead of to the owners of the business. This means that the owners are not required to personally guarantee the corporate cards. Instead, the liability rests solely with the legal entity of the business itself.
The cards may have the names of the employees on them. Some cards place the responsibility for making certain that charges are paid on the employees while others place the responsibility on the companies.
Corporations use these types of cards so that they can keep an eye on what their employees are spending when they are traveling away from the office. Corporate credit cards may allow employees to charge their expenses on the cards instead of paying for them out of their own pockets and waiting to be repaid by the companies.
Corporate business cards that are credit cards do not build the credit of business owners because the owners do not have personal liability for the balances. They may help to build the credit of the company because the cards make the companies themselves solely liable.
Corporate debit cards also do not build the credit of individuals or of the company. Apply for these types of cards does not require either the businesses or the owners to submit to credit checks for approval because they are not credit cards. However, they might help to build a company’s reputation for always making timely payments, which can aid in business growth.
One of the dangers of distributing company credit cards to employees is that they might charge both personal expenses and business expenses to the card. Even if the employees are responsible for ensuring that the payments are made, mixing personal and business expenses is never a good idea.
Some corporate business cards allow businesses to place a number of restrictions on spending so that unauthorized purchases might be prevented. For example, businesses might set individual spending limits and restrict the categories of purchases that can be completed. They might also limit the places where the cards can be used. Businesses can also conduct training sessions for employees who will be given the cards so that they understand how the cards should and should not be used.
Corporate credit or debit cards can offer several advantages to businesses, but they may also have some drawbacks. These types of cards let employers keep better track of what their employees are spending and may offer some expense management features that can help companies to keep better track of their business expenses.
If the cards are credit cards, they may be difficult for businesses to get and might charge high rates of interest. Debit cards do not provide access to credit, which means that interest won’t be charged. However, spending on debit cards also will not build the company’s credit.
There are a few differences between corporate vs. standard business credit cards. Commercial credit cards do not require guarantees by the business owners, which means that the owners will not have personal liability for the spending that occurs on the cards. Commercial cards are generally only given to established companies with annual sales in the seven figures and are generally not accessible to smaller, newer businesses.
Financial institutions that issue business credit cards require personal guarantees from the business owners. This means that both the credit of the business and of the owner will be checked before they will be approved. If something goes wrong with a business credit card, the owner may be personally liable, and it can negatively impact the owner’s personal credit as well as the business’s credit.
Commercial cards can be used for any type of business-related expenses. Corporate prepaid travel cards are cards that are commonly used to pay for travel and entertainment expenses while employees are traveling on behalf of their employers.
Companies can set rules on the corporate prepaid travel cards to specify the types of expenses that can be charged on the cards. For example, businesses might allow airfare and car rental fees to be charged to the commercial cards while restricting the cards from being used to pay for entertainment at night unless it is to entertain clients and has been preapproved.
A corporate or commercial card often has more robust controls for employers that make it easier to manage employee expenses. Employers are able to set restrictions so that employees are limited in where and when the cards can be used, how much they can spend each day, and the types of purchases that they can make.
Employees might also be able to submit information about their transactions electronically, making expense reporting simpler. However, if the cards are credit cards, the companies might not see the transactions until they appear on the monthly credit card statements.
To make certain that your corporate or commercial card program is successful, it is important that you choose cards that allow you to set robust restrictions so that you can prevent corporate fraud and unauthorized purchases.
A successful rollout of a corporate or commercial card program will require you to have a good card policy in place. Your policy should discuss how the cards can be used and the rules that you have established for them, including the categories of purchases that are authorized and that are not allowed.
Training your employees about how to use their cards and about your expense policy is also important. This allows all of your employees to start out with the same knowledge base and can help to prevent mistakes.
Generally, there are several benefits of using corporate or commercial cards at your business, including the following:
A commercial card has some important security features. These cards may have EMV chips, also known as Europay Mastercard Visa, which offer greater security than magnetic strips. Chipped cards that are used at chip-enabled card terminals for in-person purchases communicate electronically with the terminals to generate one-time codes. The codes are different every time that the cards are used, meaning that thieves can’t skim the information to gain access to the company’s information or credit line.
Financial institutions and card processors such as Visa may also offer additional security features, including corporate fraud protection in the case that an employee makes unauthorized purchases or that the card is stolen or otherwise compromised by hackers. These programs might remove the company’s liability if an investigation reveals that the charges were fraudulent.
The meaning of corporate cards also includes debit cards for corporations. These are cards that are issued to businesses that offer extensive expense controls, allowing business owners to set spending restrictions on each card that they distribute to their employees.
Businesses are able to determine how much money to make available on their corporate prepaid cards or debit cards. Each employee can be given his or her own individual spending limit and can be restricted to the types of purchases that he or she needs to make while performing the tasks of his or her job.
Company credit cards require businesses to submit to credit checks and to meet credit standards. If the businesses are approved, the purchases that are made may incur interest charges if the balances are not paid off in full each month. Purchases are added to the business’s credit line and can add to the overall level of debt. The cards offer less transparency because the transactions might not be seen until the card statements are received.
Company debit cards offer extensive controls and greater transparency. Business owners can see the transactions that are made in real time from their dashboards. Purchases are subtracted from the company’s deposit account balance instead of being added to a line of credit, which means that they will not incur interest or add to the debt.
Modern prepaid corporate credit cards or debit cards come with expense management software built right into the cards. The availability of the expense management features and the potential to electronically import the data from the cards into the company’s accounting or bookkeeping software make fraud prevention and expense tracking much simpler.
Corporate prepaid cards can allow businesses to easily plug expense leaks and to identify minor issues before they become major problems. This can help businesses to cut losses and to improve their bottom lines.
There are several features that you should look for in a commercial debit card. An ideal card should come with expense management software that allows you to set individual controls on every card that you distribute to your employees. You should be able to decide when the cards will work and when they will be turned off. You should also be allowed to restrict the use of the cards to your preferred suppliers and to set individual daily spending limits.
The Bento for Business Visa debit cards offer these types of expense controls. You can also integrate the cards with your applications by using the card API, which can allow you to create your own workflows and to automate your expense tracking and to streamline the processes that you use for payments. You can turn cards off or on with an application on your smartphone, tablet, or computer. Businesses can take advantage of a free 60-day trial and a free demonstration. The company has received excellent reviews from its customers on sites such as Capterra and Trust Pilot. To learn more, speak to a customer service representative by calling 866.290.4134.
Applying does NOT affect your credit score!*This is not a credit card.
Banking services provided by The Bancorp Bank, Member FDIC. This Card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A Inc. and may be used everywhere Visa® debit cards are accepted.