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Corporate credit cards could be a valuable expense management tool for many businesses and corporations. Compared with a small business credit card, corporate credit cards may offer specific features to facilitate purchasing across a wider organizational structure.
What Are Corporate Credit Cards?
Corporate credit cards can allow cardholders, such as employees and executives, to make business purchases directly, without the need to use their own personal funds and apply for reimbursement later.
One difference between how corporate credit cards can work, compared to other types of credit cards, is the party responsible for payment. With some corporate credit card programs, the company itself may be responsible for payment.
Corporate credit cards may also offer features aimed at midsize and larger businesses, such as tools that could integrate into a company's expense management system or controls to help manage employee spending.
Types of Corporate Credit Cards
There are many different types and categories of corporate credit cards. Some of these categories may even overlap. For example, a corporate credit card offering rewards may also offer virtual cards. Here are a few different types to keep in mind as you consider your company's needs:
- Corporate charge cards: Corporate charge cards, like their personal counterparts, may need to be repaid in full each month. They may not allow you to carry a balance from month to month.
- Virtual corporate credit cards: Virtual cards could have many business uses, such as potentially increased online purchase safety with one-time-only card numbers.
- Corporate liability credit cards: The corporation itself may be legally responsible for charges incurred by employees.
- Combined liability credit cards: The corporation and the individual employee making the purchases may share legal responsibility for the charges.
- Individual liability credit cards: The individual employee may be responsible for paying the card and filing for reimbursement each month.
- Rewards corporate credit cards: Corporate credit cards may offer rewards in the form of travel points or cash back.
The Benefits of a Corporate Card Program
The benefits of a corporate credit card program may vary depending on your card. Here are some benefits that corporate credit cards may offer:
- Expense management: Corporate credit card programs may have the ability to integrate with existing expense management platforms, eliminating manual entry and cross-platform errors.
- Expense controls: Business leaders may have more control over spending limits on each card. Managers may be able to set dollar limits, for example, or only allow cards to be used with certain merchants.
- Rewards: Corporate credit cards may offer travel points or cash back. Depending on the card, these could be funneled back into the business or dispensed to employees.
- Card management: Businesses may elect to manage each credit card individually or as a group. Finance departments could issue one payment for all cards, for example.
- Custom programs: Banks and providers may offer a customized credit card program for their needs.
- Fraud protection: Features like virtual card numbers, expense reporting tools, and spending controls might help limit instances of fraud.
- Owner liability: Corporate credit cards may operate under a corporate liability structure, potentially shielding the owner from personal financial liability if the business fails.
- Financial reporting: Accounting staff and program leaders may be able to more easily view spending patterns across teams and departments within a business.
Best Practices for Managing Corporate Cards
Corporate credit cards are a tool, and like any tool, it may be helpful to set clear rules for their use. Written policies for employees and finance managers, for example, could help outline expectations and set limits for corporate credit card usage and management.
Finance managers, in particular, may establish policies for overseeing the credit card program and resolving issues. Setting up fraud alerts or regularly reviewing employee expenditure reports for outliers, for example, could help finance managers identify issues before they turn into larger problems.
Integrating your corporate credit card program into your company’s HR and accounting platforms, if possible, may also be considered a best practice. Doing so may make it easier to manage the cards, as well as creating links to manage and track employee spending between departments.
Consider the American Express® Corporate Card Program
With the American Express Corporate Card Program, you can customize a program that is right for your business from a selection of powerful solutions, with the backing of American Express. Choose and apply for only what you need from our selection of Cards and digital tools to help you operate efficiently.
Corporate Credit Card FAQs
What is a corporate credit card?
A corporate credit card is used by larger businesses to allow individual employees to make purchases that support the organization.
What is a corporate credit card program?
A corporate credit card program describes the broader ecosystem that large and mid-size businesses use to handle purchasing, such as the physical credit cards themselves, the issuing bank, and the software to manage each card.
How could I choose the right corporate credit card for my business?
To choose the right corporate credit card for your business, you might want to consider your business needs, the cost of the card, and its features.
What are the main benefits of corporate credit card programs?
Some benefits of corporate credit card programs may include helping empower employees to make necessary purchases for the business, offering spending controls to help limit fraud, and offering rewards like cash back or travel points.
What are best practices for managing corporate credit cards?
Best practices for managing corporate credit cards may start with clearly written, easily accessible company policies on credit card use and management. Finance managers may consider placing appropriate limits on employee spending and conduct regular monitoring and oversight to help ensure the company’s policies are being followed.
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