Corporate Credit Cards Explained

There are many benefits attached to the use of corporate credit cards for businesses of all sizes. Corporate credit cards allow businesses to keep better track of their expenditures, making accounting a great deal easier, which is an especial bonus for small companies and solo entrepreneurs for whom accounting can fall by the wayside as there are so many other things to worry about. Corporate credit cards are also a great way to help build a credit profile up for your business so that you are better able to obtain business loans, credit lines from other merchants and more attractive equipment leases as well.

Why Not Just Use Personal Credit Cards?

Many entrepreneurs and new business owners are tempted to make purchases for their business needs using their personal credit cards just because they do have the credit available and it is far easier to do this than apply for corporate credit cards. This is not a good idea however. Individuals are not held liable for expenses officially made in a business’ name should things go wrong but debts run up on a personal credit card for business purposes are afforded no such protection there are also a lot of benefits attached to corporate credit cards that are not offered on personal credit cards, benefits that can be very useful to the day to day operations of a business. Even if you and your business do not have much of a credit record there are still corporate credit cards available to you that present a far better alternative to using personal cards for business expenses.

What Makes for a Great Corporate Credit Card?

There are a great many different corporate and business credit cards out there for you to choose from. All of them offer something at least a little different and what makes the best corporate credit card for one business may not be so suitable for another.

For many start up and small businesses a corporate credit can be a source of additional funding to keep their businesses afloat while they wait for invoices to be paid etc. and paying off the full balance every month just may not be possible. For these people are corporate credit card with a low APR is going to be of the biggest help. More stable businesses, who will be able to pay of their balances regularly, may benefit from the rewards attached to many corporate credit cards.

Some Things to Watch for

Whatever corporate credit card you are considering there are some things in the “finer print” that you should watch out for. For example, many corporate credit cards come with attractive 0% APR teaser rates for a certain period of time. Where so people trip up is by not paying attention to what the int rest rate will be after this introductory period will be and in the end it turns out to be higher than that of a corporate credit card they may have passed over because it had no 0% offer. You also need to pay attention to any caps on earning reward points or cash back as well as any expiration dates for reward points or redemption deadlines.

Are Corporate Business Charge Cards a Good Idea?

If you can qualify for one, and will be able to pay off the charge every month getting a corporate charge card as well as a corporate credit card can indeed be an excellent idea. The leading provider of corporate charge cards, American Express, offer business charge cards with some rather amazing perks and benefits and a good payment record on a business charge card counts for a lot in the eyes of the credit bureaus.

What benefits do corporate charge cards offer? No pre set spending limit is one, which can be helpful to cover short term immediate business expenses and some rewards and benefits that you simply don’t get with other corporate credit cards. For instance even the most basic of the American Express charge cards – the Classic Green – has a points reward program and offers regular discounts on airfares, hotels, and rental cars, all very useful for most businesses. Other cards in the American Express cards offer things like access to VIP airport lounges, exclusive concierge services and opportunities to buy and/or earn tickets with preferred seating for concerts and sporting events (great for impressing clients with)

How Many Business Credit Cards Should You Get?

For most small and medium size businesses one corporate credit card and perhaps one corporate card should be more than sufficient. It may be tempting to carry more than that but doing so could be detrimental to your businesses credit. There are many factors involved with the way that credit scores are calculated, both personal and business, and while having more credit cards may indicate that a business has more credit available to them – a plus in the eyes of the credit bureaus – too much can indicate that a company is overstretched, a definite minus.

Businesses can of course consider changing credit cards once in a while. Sometimes a corporate credit card may become available with a lower APR than the one you might currently hold and transferring balances from a higher interest credit card could save you a considerable amount of money. You may also want to transfer to a card that offers better rewards, or a higher credit limit. It certainly never does any harm to keep an eye on new corporate credit cards to see if you can score yourself a better deal.