Does Having A Corporate Card Help Your Credit?
- Corporate credit cards or commercial credit cards are issued to an employee for expense management.
- Established companies issue credit cards to their employees to allow them to charge business expenses such as flight tickets and hotel bills without depending on their cash or card.
- So, till now, if you are not using any corporate credit cards, we are going to tell you the benefits of corporate credit cards in this article.
Definition of Corporate Credit Card
- A corporate credit card is a kind of credit card issued to an employee by their business employer to use for business-related expenses.
- These cards can be termed as an employee’s satisfaction card as the employee does not have to spend money from their pocket during business tours.
- Like any other credit card, corporate credit cards are also issued by an authorized bank with a direct deal between your organization and the Credit Card Company.
- Though in all the corporate cards, the business employer’s name on it carries the cardholding employee’s name as well.
- While using direct credit cards, they cater to rewards and credit points, a corporate credit card is highly efficient to use.
Why Should Every Business Get One Corporate Credit Card?
- India is a prime center for entrepreneurs and a corporate credit card aims to solve the inconveniences faced by an entrepreneur during business spending.
- So, it is very essential to get one corporate credit card for your business.
- The obvious benefit of having a corporate credit card is to use it for various business expenses and travel expenditures.
- For any business travel purposes, you can use a corporate credit card, and then the money will be deducted from your company’s funds instead of your banking account.
- Few business expenses like cloud services, SaaS subscriptions, and sales expenses can be done only using a corporate credit card.
- The credit limit of a corporate credit card is higher than a normal personal credit card.
- The corporate credit card will not increase your burden as all the business expenses will be deducted from your company’s fund.
- In the case of an International transaction, corporate credit cards are best to use as they offer many perks to their customers, focus more on rewards, and charge low for international transactions.
- It is very simple to handle a corporate credit card.
- Employees can directly control their corporate credit card accounts and transactions.
- It helps an employee to set limitations for business expenses according to their preferences.
- When an employee uses a corporate credit card, then he can also redeem all the rewards and points that he earns while using this corporate credit card.
Tips to Manage Corporate Credit Cards
- Using a corporate credit card and a personal card are quite similar.
- You can use it for making online payments and for any type of purchase.
- The difference is that the payments that you make using corporate credit cards are registered in the company’s statements.
- While the payments that you make using personal credit cards are added to your funds.
- We have mentioned below some important tips for managing corporate cards:-
- An employee when using a corporate credit card must be fully aware of all the policies related to corporate credit card use.
- They must be responsible while using a corporate credit card for business expenses.
- Generally, the companies imposed strict restrictions on all the corporate credit cards before offering them to an employee.
- So, never try to use these corporate credit cards for any personal use.
- Employees should agree to all the terms and conditions and sign a contract regarding the usage of corporate credit cards before a company issued a corporate credit card to an employee’s name.
- Make sure you go through proper training given by your company’s finance team regarding the essential rules of using a corporate credit card.
- If you have any query you can ask the finance team later also.
Differences between A Corporate Credit Card And A Personal Credit Card
- There are a lot of differences between a corporate credit card and a personal credit card.
- Carrying a corporate credit is more beneficial than a personal credit card.
- Let’s find out the differences between a corporate credit card and a personal credit card:-
- A corporate credit card plays a vital role in your business.
- In recent times, most of our transactions are cashless; therefore using a credit card is a must for us all.
- An employee who has to make frequent travels for business purposes uses a corporate credit card to sustain business expenses.
- And this helps them not to spend money from their own pockets.
- Corporate credit cards are completely safe and efficient to use with a higher credit limit than a personal credit card.
Q- Why do established companies use corporate credit cards?
Ans- Established companies use corporate credit cards to incur business expenses for their employees such as flight tickets, hotel bills, etc.
Q- Does a corporate credit card help your credit score?
Ans- Yes, increasing the credit limit will naturally increase your credit score.
Q- When a person gets denied for a corporate credit card?
Ans- If a person is a small business owner, then most probably he may get denied for a corporate credit card based on revenue.
Q- Can I use one corporate credit card for multiple businesses?
Ans- No, you cannot use one corporate credit card for multiple businesses.
Q- Can I use multiple corporate credit cards for one business?
Ans- Yes, you can use multiple corporate credit cards for one business.
Q- How can I apply for a corporate credit card?
Ans- You can apply for a corporate credit card online as most banks allow online applications for corporate credit cards.
Q- How can I identify a corporate credit card?
Ans- You can identify a corporate credit card by looking at the first number and also by counting the digits in the credit card number.
Q- Can a corporate credit card affect a personal credit card?
Ans- No, a corporate credit card has no impact on the personal credit card.
Q- Will my credit score go up if I pay my credit card balance?
Ans- Yes, if you pay off your credit card balance your credit score will go up.