What Are Corporate Credit Cards And How Do They Work?

What is a corporate credit card? At their core corporate credit cards are similar to normal credit cards, but there are a few key differences stick around to find out what they are. Corporate credit cards can be used to make purchases on credit which must then be paid off either over a period of time or by the next billing cycle they can also offer wards whenever they're used for purchase just like your average credit card on top of that however corporate cards come with robust tools that allow companies to track spending give out employee cards and even more in today's artcle. 

I'll cover some of the basics of corporate credit cards to help you determine if they're right for your business but before i get started don't forget to click our subscribe button to follow our channel okay so here's what you need to know corporate cards tend to be targeted at large companies this means that not every corporate card will be a good fit for a small business like a sole proprietorship or unincorporated business however some corporate cards do advertise to small businesses 

for example brex which we'll discuss further in greater detail in a bit is one corporate card provider that markets his product to smaller businesses corporate credit cards are issued to companies by various financial institutions but generally their banks these cards are designed to help companies track and control employee spending and often feature robust financial toolsets once a company has access to a corporate card program it can then give employees their own individual cards and these cards can be used to make purchases and often give companies rewards for spending just like normal credit cards 

they also give companies deep insights into how employee spending operates on an individual level potentially catching fraud or unnecessary spending before things get out of hand in many cases corporate cards function as charge cards charge cards operate a bit differently from normal credit cards instead of carrying a balance from statement to statement a charge card's balance must be paid off in full by a set date this setup may seem like a burden but it's becoming popular for corporate card issuers to provide flexible terms so that companies can choose how often a balance must be paid off between rewards employee 

tracking and flexible terms we found that corporate cards could be an excellent option for many companies something that many experts we've reached out to have echoed there are a number of corporate card issuers some come from the traditional banking space while others are upstart challengers here are a few of the traditional companies that offer corporate cards the first is american express with four different levels of corporate cards amex is one of the more popular traditional corporate card issuers the four card lineup is extremely flexible companies can mix and match cards to fit the spending and travel habits of different employees and beyond the base 

four cards amex also offers a corporate program built for startups next up is capital one their one card program provides companies with real-time expense management automatic payments and mastercard standard benefits package it also features savings of up to four percent and a rewards program that allows points to be redeemed for statement credit gift cards or travel bookings jp morgan is one half of jp morgan and chase company and they offer up several corporate card programs these include programs targeted at business travelers business to business purchases and general use cases a separate virtual card solution is also available for digital payments next let's look at a few of the more modern companies in most cases these companies are venture-backed startups attempting to disrupt the corporate card industry first up brex when it comes to venture-backed corporate card issuers it's hard to dispute brexi's place atop the hill besides building a smooth corporate card experience brex has also started assembling what it calls a financial operating system for businesses with business cash accounts expense tracking instant revenue and venture debt financing all under one roof businesses with brexes corporate card will be able to tap into unique rewards schemes as well as set up employees spend controls ramp is a relative newcomer but it has been providing a healthy challenge to brexi's top dog position their corporate card is designed to help companies spend less and it does this through automated expense reporting and an insights feature that finds duplicate subscriptions unclaimed rewards and lower pricing plans divi is another corporate card issuer attempting to solve common issues in the business world focused on spend management on the card side of things divi doles out up to seven times rewards and features full on team by team expense tracking software with spend notifications and instant purchase categorization row is the newest of the four fintech companies 

we've highlighted featuring a full banking suite alongside its corporate card product corporate cars from roe dole out cash back for purchases promise high credit limits and allow for flexible terms as with most things there are benefits and drawbacks to corporate cards whether the pros outweigh the cons for your business will largely depend on how you're structured and how much thought you give to setting up spending rules and boundaries many business owners and industry experts that we've talked to agreed upon one thing corporate cards can save time here's a snapshot of what a few of those experts have said about the benefits of corporate cards beyond those pros we've also found that corporate cards can be great addition to a company's financial toolbox because they usually offer rewards which can provide extra savings whenever an employee uses the card their robust expense tracking tools can also provide a level of detail on what your company purchases something that isn't always easy or intuitive without a corporate card program and while corporate cards have plenty of convincing reasons to get them.

They aren't without their drawbacks corporate cards could lead to overspending or even fraudulent purchases if they aren't monitored closely unfortunately improper use of spending controls could cost the company time and money once let loose with a corporate card employees might make unnecessary purchases some corporate card programs may be too costly for some businesses while it's possible that corporate cards could end up costing your company more than it's worth staying on top of expense tracking and making sure employees understand guidelines will limit unneeded spending additionally some very small companies such as sole proprietorships or those with limited number of employees may not see much benefit with a corporate card program even if they qualify for one in those cases sticking with a small business or personal credit card may prove to be the correct choice and while corporate cards and business credits functionally do similar things there are a few key differences credit cards designed for small businesses need to have very different benefits on top of those differences corporate cards can also be more difficult to access because of stringent eligibility requirements additionally corporate cards generally place liability on the company while small business credit cards often require personal guarantees normally putting the business owner on the hook for any debt finally some small business credit cards place a cap on the number of cards you can issue to employees corporate cards generally don't have this sort of cap to learn more about the differences between corporate cards and business credit cards check out the link in our description below so now that you know more about corporate cards you're probably wondering how your company can get one luckily the process isn't too complex although it's not as refined as applying for a personal or small business credit card to start make sure your company qualifies for a corporate credit card in the first place this usually means your company must be an s corporation a or an llc and 

on top of that you might need to hit certain cash revenue or credit requirements next determine which issuer you want your company to work with and reach out to learn their application process some offer demos while others may have a stricter application process but always make sure to shop around before deciding on the program for your business get a more detailed look at the process of getting your company a corporate card with our guide how to get a corporate credit card linked in the description below for most companies picking a corporate card program out of the trifecta of brex ramp or divi will be a smart choice all.

Three companies offer corporate card products targeted towards modern companies that need flexible solutions other companies may prefer a traditional solution however such as american express or capital one for a deeper look at our favorite corporate credit cards head on over to our in-depth analysis of the best corporate credit cards on the market linked in our description below and that's it for our article today hope you liked it if you did please hit that like button subscribe to our channel and don't forget to leave your comments in the comment section below until next article.