What Is a Corporate Charge Card?

If you’re a business owner or you are managing a business for your partners and investors, you already know how important it is to have all of your expenses managed efficiently. There are a lot of ways to do that but there is one that can consolidate all expenses under one card. This is why corporate charge cards are quite popular in many businesses and companies nowadays.

But, what is a corporate charge card? A corporate or business credit card is a type of credit card that offers benefits and features for businesses no matter the size, scope, and industry they belong in. With so many advantages and perks to offer, a corporate charge card is one of the most cost-effective cards out there.

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If you want to learn more about what a corporate charge card is, how it works, and how it can help your business, check out the article below to find out.

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A Credit Card For Your Business

A corporate charge card functions very similar to an average credit card. You have credit limits, rewards, and interest rates to take care of but the difference is that it is geared towards business owners.

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Business owners are largely responsible for the transactions and charges made with the card. Most of the time, corporate charge cards are only issued to companies and businesses with a good track record and have already established a good business credit history.

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This means that they have not filed for any previous bankruptcy or do not have any liabilities before applying. There are a lot of perks in using corporate charge cards and many of them either have cash rebates or miles as rewards.

One of the biggest benefits you get from using such a credit card is that it is meant to handle all work-related business expenses. You can streamline and monitor all of your expenses through this card.

How Do They Work

Corporate charge cards function just like your personal credit cards. You can use the card to purchase any item or do transactions like paying the utility bill or making large purchases using the card. In doing so, you also receive rewards based on the credit card that you chose.

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You will also be making regular payments on your account so you can increase your business credit score and improve your business credit history. All of these are quite familiar if you already have a personal credit card. What makes the corporate charge card different is that you can issue additional credit cards under your business credit card without having to deal with the charges.

The additional credit cardholders will be responsible for the bills that are charged under their accounts while you continue to pay for your bills. It is generally designed to manage the business line of credit while also receiving discounts on different business expenses.

The Pros of Using a Corporate Charge Card

Having a corporate charge card has its own set of advantages over the usual personal credit card. One of the main reasons why a lot of business owners tend to choose a corporate charge card is that it gives them access to a corporate line of credit.

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This means they have far higher credit limits and extra features on their card than the personal credit card. You also get to earn rewards on purchases made with the card and you can issue the same credit cards to your employees for their expenses as well.

By having a corporate charge card, you also unlock new features such as premium accounting services that help your company with accounting and budgeting. This makes tracking all of the expenses and other transactions a lot easier for you.

Some Drawbacks That You Need to Know

While there are a lot of advantages to using a corporate charge card, you also need to learn that there are certain drawbacks to the card. Most corporate charge cards are only available in well-established companies and businesses.

Many providers don’t offer them to small businesses as they cater to businesses with high annual revenue. This alone makes it quite difficult to apply for the card. There is also a long application process which can include a financial audit of your business.

It takes a lot of time and effort for you to apply for the card without the guarantee of approval. Additionally, you also need to have a positive business credit so you’re able to apply for the card.

How to Qualify for a Corporate Charge Card

Speaking of applying for the corporate charge card, there are also a lot of things that you need to consider to qualify for it.

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You can call your credit card provider to determine if they offer a corporate charge card and discuss with them if they have a corporate charge card that fits your business and revenue.

As mentioned above, the application process is quite lengthy and meticulous. You will need to provide proper documentation of all the financial transactions you have made.

This means that you must always have a good credit score for you to apply. Be ready to be audited on your financial status if you want to apply.

Tips for Managing Your Business Credit Card

Once you have your corporate charge card and you begin to provide your employees with their own cards, there are certain things that you need to do to manage it properly. You may not be affected by the transactions made with their card but it will still affect your entire business.

Make sure that you establish protocols and policies for all the cardholders. There should only be business transactions made with the card so that it can be audited properly. Highlight the importance of tracking all payments as well as receipts so it is easier for accounting.

As the primary cardholder, you should also monitor and manage all the expenses made by the card and the additional cards. Large companies often have a specific department that will do the monitoring on behalf of the owner.

Conclusion

A corporate charge card is a very powerful credit card that can help streamline all of your business expenses. It can even be used to improve your cash flow and help you earn a lot of rewards as well as reduce misuse and fraud and simplify your accounting. If you want to apply all of these benefits to your business, go ahead and apply for a corporate charge card today!