Who else can use corporate credit cards?
Corporate cards aren’t always limited to private entities. Government agencies and nonprofit organizations could find these cards helpful as well.
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What is a corporate credit card?
An excellent credit card option for large businesses.
Corporate credit cards are designed for companies with revenue in the millions and with a large number of employees. That’s because corporate cards come with features like employee spending tracking to reduce fraud and misuse, manual-task automation and streamlining finance management.
What’s the difference between corporate and small business cards?
The size of the company these cards are meant for is the main differences between corporate and small business credit cards. This table explains a few other key differences.
| Corporate credit cards | Small business credit cards | |
|---|---|---|
| Who are they for? | Issued to large companies and corporations with more than $1 million in revenue. | Designed for the small business owner with one or two employees with access to a company credit card. |
| Who is liable? | The company is 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. | In most cases, you are personally liable for any debt you incur on these business cards. |
| Do they report to personal credit? | No. Your personal credit won’t be affected. Instead, all card activity is reported to business credit bureaus. | Depending on which card you choose, the bank may report to personal and business credit bureaus. Your personal credit 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 and approve reimbursements. | Some banks offer spending management tools for small business credit cards. However, these are not usually as efficient as the custom-designed software used by corporate credit cards. |
Pros and cons of using a corporate credit card
A corporate credit card comes with some benefits, but there are downsides as well.
Pros
- 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.
Cons
- Annual fee. Corporate cards may cost more than small business credit cards. Especially if you have a large number of employees and each card comes with an annual fee.
- Can’t carry a balance. Because most corporate cards are charge cards you will have to pay your balance in full before it’s due.
- Poor rewards structure. If you’re in it for the rewards, corporate cards may feel stingy. That’s because they either have no rewards program or they let you earn a meager 1x points on all purchases.
- High eligibility requirements. You can get a small business credit card even if you’re a sole proprietor with no employees. But to get a corporate card, you need to have at least $1 million in revenue each year.
How do I qualify for a corporate card
The eligibility criteria vary between providers. In general, you need to have a revenue of at least $1 million, and some providers may even require a certain number of employees to use the card, to charge a certain amount each year and your company to be registered as an S or C corporation.
Should I get a corporate card?
If you need a large number of employee credit cards and if your business has a revenue of at least $1 million, a corporate credit card may be a better choice than a small business credit card.
- The first corporate card for startups
- No personal liability or security deposit needed - your personal credit score won't be affected
- Minimum of $100,000 of funds in corporate bank account and US EIN required
- Earn 7x points on rideshares, 4x points on travel booked through Brex Travel, 3x points at restaurants, 2x points on software subscriptions and 1x points on all other purchases
- Get a credit limit 10 to 20 times higher than traditional business cards
- No foreign transaction fees
- Build business credit - Brex partners with Experian to report your on-time payments
Which banks issue corporate credit cards?
- JPMorgan Chase corporate card. You can choose between six available card options. This includes cards that offer rewards, streamline business-to-business purchases, give perks for travel and entertainment expenses and help government and nonprofit agencies.
- American Express corporate card. Select between seven corporate cards that streamline spending on travel and offer cash back on all purchases for a range of employees.
- Citibank corporate card. With eight cards under the Citibank umbrella, this is the largest selection of corporate cards you can find. Choose between travel cards, cards for meeting and event expenses and virtual account cards.
- Capital One corporate card. The only corporate card you’ll find with Capital One is its One Card that offers benefits like rewards, unlimited employee cards and no foreign transaction fees.
- Wells Fargo corporate card. The WellsOne® Commercial Card reduces manual processes by up to 90% and helps you expand your business globally with cards denominated in local currency.
What to consider when choosing a corporate credit card
Before you choose a corporate card, here’s what to keep in mind:
- Annual fee. Most corporate credit cards have an annual fee from $0 to $200, and some charge for each card your business owns. Make sure you can make the annual fee worth it through rewards and cash back before you choose.
- Interest rates. Most corporate credit cards are considered charge cards with no APRs. So you’re expected to pay the balance in full monthly.
- Foreign transaction fees. You can find strong travel corporate and business cards that waive the foreign transaction fees. If you choose a card that doesn’t focus on travel, you could be on the hook for fees at around 3%.
- Rewards. Rewards for corporate cards are unimpressive at about 1x for all purchases, 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 to boost business earnings.
- Eligibility and business requirements. For corporate cards, eligibility criteria vary. But in general, your business will have to earn at least $1 million to $10 million annually.
Who is liable for corporate credit card expenses?
Corporate liability is most common with corporate credit cards. But if your business spends a lot and has many employees, some banks may tailor a liability program specific to your business.
- 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 issuers 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 cardmember 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 what spending is allowed in your company.
- Set up spending limits and controls for employee cards to help manage spending and set parameters.
- Setting up alerts to monitor card activity can help reduce fraudulent spending and help manage your budget.
- Incentivize employees by allowing them to cash in rewards for personal use.
Featured cards: JP Morgan Chase corporate cards
JP Morgan Chase offers six corporate cards and are sold as commercial credit cards:
- Single-Use AccountsSM. Also called SUA, it acts like a check that provides you with a 16-digit virtual account number for each payment. This helps you reduce check writing and standard card payments, and makes your payments more efficient.
- Purchasing Card. Aimed at business-to-business payments with the goal of simplifying and managing purchases.
- Corporate Card. This card is meant for businesses that spend on travel and entertainment.
- One Card. Businesses that need both business-to-business management and traveling and entertainment spending can get them with One Card.
- Corporate Flex Card. The only JP Morgan corporate card that lets you earn reward points on all of your purchases.
- GSA SmartPay® 2 Solutions. Designed for government agencies to help streamline payment and procurement processes.
Compare small business credit cards
If your business is not ready for a corporate card, consider applying for a small business credit card.
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Bottom line
With more invoices, employee credit cards and cashflow, your small business may be ready for a corporate card. These cards can help your business process payments easier and manage employee spending.
If your small business is still making less than $1 million annually, consider comparing small business credit cards.
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