Corporate Credit Cards

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A range of different corporate cards and business cards are available, so it pays to take some time to work out which ones suit your particular needs.

If you are a registered company in Hong Kong, choosing a corporate credit card for business purposes can be a great way to monitor business expenditure. Corporate cards and business cards are almost identical to regular personal credit cards, with just a few notable differences. You still use them to pay for purchases directly through merchants or using online payment facilities.

Why choose a Corporate Credit Card?

The primary difference for corporate credit cards is that they are usually issued in the company name, as opposed to being issued in the name of an individual. This difference means the company is responsible for any debts accumulated on the account, not the individual.

Corporate credit cards are a great way to keep business spending completely separate from any personal spending, which also reduces the amount of time spent reconciling accounts between the two.

Eligibility for Corporate Credit Cards

To be eligible for a corporate or business credit card you must be a sole proprietorship, partnership or limited company registered or incorporated in Hong Kong. Some providers will also only offer cards to companies with a minimum annual revenue, such as HK$8 million, and a minimum number of employees. Companies must also have been in operation for a period of at least six months to two years. In addition, some banks will only offer corporate credit cards to existing banking clients.

Amex black credit card

Streamlined Reporting and Management

Corporate cards tend to offer a broad array of management reports that show itemised listings of transactions. This makes it much easier to track and monitor expenditure. It also makes reporting much easier at tax time.

Accounts can be shown so that details regarding the entire account expenditure can be generated, or you can choose to create reports showing transactions conducted by each individual cardholder. You can also review spending by country and category, such as travel or entertainment.

There are plenty of detailed reporting options available with these types of accounts. Monthly bills will be sent to both the individual and the nominated person within the company. Depending on the bank or credit card provider, some will allow generated reports to be imported directly into your company’s accounting and reporting systems.

Spending Controls

Many companies choose to issue corporate cards to employees who may need to purchase work-related items as part of their job descriptions. Each individual card issued can have individual spending limits and controls placed upon it. This means an employee who is likely to use the card to purchase the office stationary may have a much lower spending limit than an employee required to travel internationally for business purposes.

You’re also able to set customised spending controls for each individual card, including daily spending limit amounts and overall monthly spending limits.

Corporate spending

Improve Cash Flow Management

All businesses have periods where cash flow is a little tighter than usual. During those months, it’s possible to use the available credit on the corporate card to cover expenditure until cash flow frees up again.

Corporate credit cards typically offer an interest-free period of between 50 and 60 days. This period enables you to pay for business expenses at the beginning of the month and take advantage of your account’s credit facility for a month or so. The interest-free days only apply to purchases made on the cards, not cash advances.

If cash flow is seriously tight, the majority of corporate cards and business cards will allow you to make a minimum payment only at the end of the month. This means you’ll carry a debt over to the following month that will incur interest charges until it’s repaid.

While carrying a debt over the long term can get expensive at credit card interest rates, this type of temporary credit can be helpful until cash flow becomes more predictable again. You have the flexibility to manage your cash flow and repayments in the way that suits your business at that time.

Complimentary Insurance and Benefits

Depending on the bank or credit card provider you choose, you may find that your account has some complimentary insurance attached to it. This may include business related policies, travel insurance and cover to protect you against unauthorised transactions.

This insurance offers companies a level of protection against misuse of the card by employees. It may also offer a level of coverage against fraudulent activity on the account, in the event of any of the employees’ cards being stolen.

Many corporate credit cards also include benefits for employees who travel overseas on business, such as a free airport limousine service, access to business lounges, a waiver of foreign transaction fees, and overseas accident and medical coverage.

Corporate Credit Card Reward Points

Some corporate cards and business cards offer very generous rewards programs. You have the ability to accumulate rewards points based on the spending amounts across the entire company.

Depending on the card you choose, you may be able to allocate reward points to individual employees or redeem points on flights, vouchers, or other items that might be used for staff incentives. It’s up to you.

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