Even if you don’t have a credit card, you’re more than likely to know what one is. Used correctly, they can be a useful tool in your financial armory. Not only are they convenient, but they can also protect your purchases, earn you points, and boost your credit score too.
But what about corporate credit cards? Possibly you’re not as clued-up on these? If you’d like to find out more, read our guide.
What is a corporate card account?
Its name lives up to its function. A corporate credit card exists for companies. But it’s different from a regular business card. This is largely down to one fact: it generally isn’t issued to an individual representing a company.
Instead, the card account is issued to the entire corporation itself. Put simply, eligibility is based on the entire corporation’s financial history.
Applications for traditional business cards, in contrast, tend to focus solely on the individual credit history of the CEO or director.
A corporate credit card means that firm leaders are not responsible for company debt. Instead, the entire company is legally responsible for paying the bills incurred by this account.
Are there different kinds?
In short, yes. There are two different kinds of corporate credit cards: personal and company.
Employees that use the former are expected to submit their own expense reports. They are then responsible for paying the issuer directly. So, unlike a traditional business model, firms don’t have to cover individual expenses. They only need to do this for company cards. Many UK casino sites still approve payments made through credit cards.
How can it benefit a business?
A corporate credit card account can be useful if you own your own business, but only if you manage your finances effectively. Ensure that all your employees are aware of your company spending policy, so they use corporate credit cards sensibly. In addition, you may want to underline the risk of mixing personal and business costs. This might be particularly tempting for employees using individual corporate cards.
One of the main advantages of a corporate credit card is that it eliminates the need for your employees to submit expense claims. Employees can simply use their card to make essential business purchases and you only need to pay one monthly credit card account, rather than several employees’ personal accounts. It also protects you if your employee misuses the card.
To help staff avoid this, why not offer training sessions on the subject? You could also provide simple guidelines on practical credit card usage. Keep your team informed and your company can benefit from this payment solution.
Plan effectively, and you’ll be able to make the most of a corporate credit card. As always, strong financial management is the key to business success.
