With all the decisions business owners have to make, choosing a corporate credit card should be one of the easier ones. But there are differences between the cards that can provide significant bottom-line benefits to your company.
Extra fees, hidden fees
Most corporate cards have annual fees, however fee-based cards can usually compensate for their cost. For example, some offer an extended interest-free payment period, which makes your card a great source of short-term, interest-free loans.
And if any employees travel overseas for work, pay attention to foreign-transaction fees. These are charged by many banks and card providers on top of the exchange rate for charges made outside of your home country.
The right insurance
Think for a moment about the purchases made with a corporate card. While often used for meals and gas, the card's charges might also include air travel and/or buying materials and office supplies.
In addition, since weather or human error can create challenges when you're travelling, a corporate card that includes automatic coverage for flight or baggage delay or accidents is key. With a card that delivers the right coverage, you won't need a separate insurance provider for travel.
Just like consumer cards, many business credit cards offer loyalty programs, so ask some of the same questions as you would for your personal cards. Do you get points for every dollar spent? What is the value of the points generated, and how and when can you redeem them? Can you apply the value of points against your card balance? Do the points expire?
If you've ever discovered that your personal points expired before you could use them, you'll know it's extra work to keep track of them. That's compounded in a business situation, so cards that can automatically apply points to the balance are ideal because you don't have to find time to decide how, where and when to spend them.
Accounting and accountability
Consider your employees' needs in a card. A corporate card replaces petty cash but can also be available for larger purchases, which may also be insured by the card. A credit card provider should also offer automatic reporting and expense analysis across your team. This feature will save you a lot of time at year-end by tallying up expenses and sorting by vendor and/or spend category, highlighting opportunities to negotiate volume discounts with vendors. Those reports can also preemptively flag employee card misuse and the card may have some level of coverage to protect you if misuse occurs.
And don't forget about the card provider's own accountability. If something goes wrong, how fast and efficiently will they get things resolved? Do a web search for a card's customer-service ratings before you commit.
Marketing and employee retention
Your choice of business card should be part of your marketing and employee-retention strategies because your customers, clients, suppliers and staff will take note. The card you use at meetings and events says something about you. And for a valued employee who is always on the road or in the air, a card that rewards them with personal perks such as points they can use against their own leisure travel is a significant way to show you value their contribution.
Balancing the benefits: How do you decide?
Founders and sole-proprietors can easily manage and reap the benefits of their business credit card. As the business grows, capturing the advantages of perks and benefits of a wider corporate solution can become a competitive advantage. Taking the time to research the right business credit card for your needs today and into the future will help you plan effectively and add value to your operations down the line.
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.