Corporate Credit Cards

A corporate credit card will allow a business to exercise far tighter control over certain businesses expenses, such as travel and entertainment. The vast majority of business owners may find it particularly difficult to keep track of certain business expenses if they are constantly using a personal credit card. Therefore, in order to avoid confusion, using a corporate credit card could be the ideal solution. A corporate credit card can be issued to various businesses including corporations, government entities and even non-profit organizations.

Corporate credit cards are not solely for the use of a business owner, and in many instances they are issued to employees in order to keep track of their business expenses. However, these cards that are to issue to employees are often referred to as corporate charge cards. Just as with a personal credit card, most corporate credit cards are also issued by large financial institutions.

With that said, it is highly unlikely that you will see a corporate credit card advertised in traditional media, as they are typically made available as a custom-made feature, as opposed to a pre-packaged product. Some of the main features of a corporate credit card include:

  • Repayment terms differ from personal credit cards, as payments can be made on a monthly, bi-monthly or quarterly basis.
  • The interest rate will typically range from 12% to 29% which, once again, differs from a personal credit card, and is actually much higher, although this is primarily due to the much higher credit limits available.
  • The credit limit will typically range from $50,000 up to millions of dollars, although you should be aware that the annual fee is generally fairly low.
  • Corporate credit cards can be used across the world to pay for business related expenses, such as travel and entertainment.

The main advantage of a corporate credit card is that a business owner or business employee is able to make business purchases without the need to carry excessive cash, and therefore this will significantly reduce the risk of theft or fraud. In addition to this corporate credit cards will simplify accounting and auditing procedures.

There are also certain problems associated with corporate credit cards and these include:

  • They are notoriously difficult to obtain, and it is essential that a company trying to obtain a corporate credit card has a good credit history over a fairly long period of time. They must also be able to show that they have substantial assets and have a history of generating profits for a maximum period of five consecutive years prior to applying for the card.
  • They can also cause problems when corporations are attempting to transfer large balances.

A business will need to provide certain information in order to be approved for a corporate credit card. These details will include the business name, address, tax identification number, phone number, fax number, industry type, annual revenue and start date is also necessary, and all the names of the people who will use the card should be provided.

Just as with a personal credit card, a corporate credit card can be applied for in person, over the phone, although the most popular method is to complete an online application form. As mentioned, most of the major financial institutions will provide corporate credit cards and amongst the most popular are the GE corporate credit card, ICICI Bank corporate credit card American Express Blue, American Express Community Business card, American Express Business Gold card, American Express Business Platinum card and INTRUST corporate credit card OnLine.

One important distinction that needs to be made is that corporate credit cards differ from small business credit cards. Possibly the biggest distinction will involve the payment responsibility. A small business credit card will typically be issued in the personal name of the small business principle, although their business will be jointly responsible for keeping this account current. However, corporate credit cards are generally issued in the name of the corporation, non-profit or government entity name. Therefore, repayment responsibility will be placed upon the organization and not the individuals using the cards.

Another important factor that both businesses and individuals who use corporate credit cards should be aware of is that the credit card company will generally make a credit enquiry on all individuals who have been named to use the card. This is basically to ensure that a specific employee does not have a derogatory credit history. If it is found that a certain employee does not have the best credit record, the company may be asked to guarantee their charges. However, details of how a corporate credit card is used and paid for will never appear on an individual’s credit report.

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