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Is my small business ready for a corporate card?

What you need to know before you upgrade from a small business credit card to a corporate card.

If you’re running a small business with a few employees, managing your finances may be relatively easy. But as your revenue starts to grow into the millions and your number of employees increases, things can get complicated – and it may be time to consider switching to a corporate credit card. Aside from simplifying the accounting process, a corporate card allows you to track spending, set individual employee spending limits, reduce fraud and misuse and ultimately streamline the financial process.

What’s the difference between corporate and small business cards?

Corporate credit cardsSmall business credit cards
Who are they for?Issued to large companies and corporations that meet the minimum revenue requirement, which is usually around $1 million.Designed for small business owners with one or two employees and a low income.
Who is liable?The company is usually entirely liable for all debt. Before issuing the card, the bank reviews the company’s finances and uses some of its assets as collateral. However, some banks will tailor cards allowing you to choose your liability options.The business owner is usually personally liable for any debt incurred on the card. However, some banks offer small business cards that come with reduced liability.
Do they report to personal credit bureaus?No. Your personal credit won’t be affected. Instead, all card activity is reported to the business credit bureaus.Depending on which card you choose, the bank may report to both the personal and the business credit bureaus. Your personal and business credit scores can take a hit if your business runs into financial trouble.
Can I monitor employee spending?Yes. This is the main perk of this type of card, especially if your business has several employees with access to business cards. You can easily track spending for each employee, approve reimbursements and set spending limits.Some providers offer access to business tools which allows you to control spending, set limits and read expense reports. However, these tools are not usually as efficient as the software used by corporate credit cards.

Who else can use corporate credit cards?

Corporate cards aren’t always limited to private companies. Government agencies and non-profit organizations could find these cards helpful as well.

Applying for a corporate credit card

To apply for a corporate credit card with a bank or credit union, you will typically need to hold business accounts with them already. While this is not always the case, it is difficult to compare and apply for corporate cards online, so you will likely have to make an appointment and speak to a representative in-person at a branch.

Before you apply for a corporate card, take into account the type of business credit card that you’re looking for. Some banks and credit card providers offer up to three different types of cards: purchase credit cards, corporate credit cards and commercial credit cards. While all three types of cards are meant for high earning companies, they vary in terms of features, fees and purpose.

  • A purchase card tends to be the most basic type and can help to eliminate paper-based purchasing and invoicing.
  • A commercial card tends to be an “all-in-one” type card, where you can combine purchasing, travel expenses and business purchases all into one. With a commercial card, you will likely be able to take advantage of the best features and business tools.
  • A corporate card tends to sit in between these two types and caters mostly toward travel and business related expenses.

Which banks and providers issue corporate credit cards?

While this is not an extensive list, you may be able to find either Mastercard or Visa corporate cards from:

  • US Bank Canada
  • Citibank
  • Citizen Bank
  • Fleet Cards Canada
  • Desjardins

What to consider when choosing a business credit card

Annual fee

  • Corporate credit cards typically have an annual fee – and some charge for each card your business has. Make sure you can make the annual fee worth the cost by earning and redeeming rewards and cash back.
  • Most small business credit cards have an annual fee of $0 to $499, however most don’t charge an annual fee for supplementary cards – although this isn’t always the case, especially if you have a premium business card.

Interest rates

  • Some corporate credit cards are charge cards, which means you’re expected to pay the balance in full each month. You can also find regular credit cards and prepaid corporate cards.
  • The majority of small business credit cards have an APR of 14.99-19.99% and carry a penalty APR of up to 30%. American Express is the only card provider that offers small business charge cards.

Foreign transaction fees

  • Most credit cards in Canada charge a foreign transaction fee of 2.5%. It can be difficult to find a business credit card that waives this fee, although there are usually a couple on the market at any given time.

Rewards

  • Rewards for corporate cards vary between providers – if they offer any at all. If your card offers rewards, you can arrange it so your employees can use rewards as a perk, or you can accrue them on the main account.
  • Depending on the card you choose, small business credit cards have higher rewards-earning potential. In some spending categories — like office supplies or gas — you can earn high rates of points or cash back. With these types of cards, the rewards usually accrue on the main account.

Eligibility and business requirements

  • For corporate cards, eligibility criteria varies, however you’ll likely need to meet a minimum yearly revenue requirement in order to be eligible for a card.
  • With a small business credit card, there is no minimum revenue or employee requirement. However, the card provider looks at your personal finances and credit score to determine if you’re eligible for a small business card. Your credit limit will be set according to your personal credit history – unless you already have a business credit history.

Benefits of a corporate card

A corporate credit card comes with several benefits, including:

  • Management of expenses. With more employees using cards, it’s easier to manage spending with the tools offered by corporate cards.
  • Spending controls. Set spending limits and alerts for all of your employees to help manage your budget.
  • Fraud reduction. With alerts and reports, you can manage fraudulent spending before it gets out of hand.
  • Powerful reporting tools. Reporting tools put your employee’s business expenses all in one place to help you generate reimbursements and manage spending.
  • Less personal risk. Corporate cards don’t affect personal credit scores. Your business is responsible for all debt accrued on the cards.

Who is liable for corporate credit card expenses?

Corporate liability is most common with corporate credit cards. However, if your business spends a lot and has many employees, some banks may tailor a liability program specific to your business needs.

  • Corporate liability. In this case, the company is liable for all charges, except in specific circumstances when there are unauthorized charges.
  • Individual liability. This program holds the employee fully liable for charges. Card providers check employee credit scores with a soft pull, and require that employees submit expense reports for company-related purchases.
  • Combined liability. This makes both the company and each card member jointly liable for the credit card. In this case, the company isn’t liable for purchases that aren’t related to the company.

Tips for using a corporate credit card

  • Consider creating a corporate credit card policy so your employees understand the type of spending that is allowed.
  • Set up spending limits and controls for employee cards to help manage spending.
  • Set up alerts to monitor card activity to help reduce fraudulent spending and help manage your budget.
  • Incentivize employees by allowing them to cash in rewards for personal use.
Back to top

With invoices flowing in, more employees and a bigger cashflow, your small business may be ready for a corporate card. While corporate cards can help to streamline your accounting process and manage employee spending easier, they also provide relief from personal liability. However, you’ll need to meet the eligibility requirements, which usually includes having a large revenue.

If your small business is still making less than $1 million annually, has a fluctuating cash flow or only a few employees, consider comparing small business credit cards instead.

Compare small business credit cards

Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Welcome Offer
American Express Business Edge Card
19.99%
21.99%
$99
N/A
Earn up to 57,000 Membership Rewards points in your first year. Earn 45,000 Welcome Bonus points when you charge $5,000 in purchases to your Card in your first three months, and earn 1,000 Membership Rewards points each month (a total of 12,000 annually) when you spend a minimum of $3,000 on eligible purchases.
American Express Aeroplan Business Reserve Card
16.99%
21.99%
$599
N/A
Earn up to 65,000 Welcome Bonus Aeroplan points and a $100 Statement Credit as a new cardmember.
BMO Rewards Business Mastercard
14.99%
22.99%
$0 annual fee for the first year ($120 thereafter)
N/A
Get 35,000 points and the $120 annual fee waived in the first year (a total value of $295 when you pay with points).
BMO Air Miles Business Mastercard
19.99%
22.99%
$120
N/A
Get up to 3,000 AIR MILES Bonus Miles ($310 towards your purchases with AIR MILES Cash).
BMO Cashback Business Mastercard
19.99%
22.99%
$0
N/A
Get 10% cash back on gas, office supplies, cell phone bills and internet bills for 3 months.
BMO Air Miles No-Fee Business Mastercard
19.99%
22.99%
$0
N/A
Get 1,000 AIR MILES Bonus Miles (over $100 towards your purchases with AIR MILES Cash).
American Express AIR MILES for Business Card
N/A
N/A
$180
N/A
Earn a Welcome Bonus of 2,000 AIR MILES when you spend at least $5,000 on eligible purchases within the first three months
Business Platinum Card from American Express
N/A
N/A
$499
N/A
Earn a Welcome Bonus of 75,000 Membership Rewards points when you charge $7,000 in purchases to your Card in your first three months of Cardmembership.
Marriott Bonvoy Business American Express Card
19.99%
21.99%
$150
N/A
Earn 60,000 Welcome Bonus Marriott Bonvoy points after you charge $5,000 in your first three months of Cardmembership. Plus, earn a $150 Statement Credit after spending $15,000 in your first year of Cardmembership. Terms apply.
American Express Business Gold Rewards Card
N/A
N/A
$250
N/A
Earn a Welcome Bonus of 50,000 Membership Rewards points when you spend at least $5,000 on eligible purchases within the first three months.
American Express AIR MILES Gold Business Card
19.99%
21.99%
$0
N/A
Earn a Welcome Bonus of 150 AIR MILES when you spend at least $1,000 in eligible purchases within the first three months
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