| 9 min read

What Is a Corporate Credit Card & How Does It Work?

Credit cards are useful tools for businesses, offering short-term financing and providing a way to make big purchases without carrying large amounts of cash. Most also allow you to request employee cards, which let your employees make purchases on your business’s behalf.

Getting a corporate card for your company can make managing its finances much easier. Here’s what you need to know before applying for a card.

What Is a Corporate Credit Card?

A corporate credit card is a lot like a personal credit card. However, it is issued to a business rather than a person, and that business is responsible for charges made on the card.

Corporate credit cards offer a revolving line of credit to the business. This means you can use the card to borrow money, up to a limit, whenever you need financing. You can draw from the line multiple times and only pay interest on the outstanding balance.

How Corporate Credit Cards Work

Corporate credit cards are a tool your company can use to borrow money. Simply swipe your card or enter its details in an online store to make a purchase. The credit card issuer will make the payment for you and add the amount to your outstanding balance.

You’ll get a bill outlining the minimum payment and your current total balance each month. There may also be interest charges if you’ve carried a balance from the last billing cycle.

The way that you use your corporate credit card will impact your business’s credit score. Use it wisely, don’t overborrow, and make monthly payments to improve your score. 

Borrowing too much and missing payments can damage your credit, making it more difficult to borrow money in the future.

Your corporate card may also offer perks and rewards. For example, many travel cards or cards that are partnered with airlines or hotels give perks like airport lounge access or room upgrades at hotels. You can even earn cash back or airline miles on purchases.

Most corporate credit cards even let you set up employee cards, which means you can get multiple credit cards that all charge to the same primary account. This allows you to give multiple employees a card that they can use to make purchases on your company’s behalf. 

Employee cards also tend to have options to control and track each worker’s spending. Plus, your employee’s spending can help you rack up rewards faster if you have a rewards card.

Benefits of Corporate Credit Cards

There are many reasons to open a corporate credit card for your business.

  • Build business credit: Your transactions with your corporate credit card can be a good way to build credit. If you keep your balance low and never miss a payment, you can boost your company’s credit score and secure cheap financing in the future.

  • Easy access to credit: Credit cards are among the easiest ways to borrow money. If you regularly need access to small amounts of credit, it’s a good idea to have a credit card handy so that you don’t need to apply for new loans for every purchase.

  • Perks and rewards: Many corporate credit cards offer cash back or travel rewards that let you benefit from your business’s spending. They may also offer perks like discounts to popular retailers, access or integrations with popular business budgeting, and expense-tracking tools.

  • Employee cards: Giving your employees corporate credit cards lets them make purchases on the company’s behalf without you having to reimburse them. You can also use employee cards to track and control your company’s spending and accumulate rewards faster.

  • Avoid personal liability: If your company has sufficient credit, operating history, and revenue, you might be able to get a corporate credit card that doesn’t require a personal guarantee. If your company can’t pay the bill, you won’t be personally liable for the balance.

How to Choose a Corporate Credit Card

Consider these following factors when choosing a corporate credit card for your company.

  • Personal guarantee: Some small business credit cards require that the business owner personally guarantee the debt, meaning you could be liable for the balance on the card account if your company can’t pay it.

  • Rewards: Think about what you spend a lot of money on. Do you do a lot of business travel? Or are your business expenses happening elsewhere? Choose a card that offers rewards where you spend the most money.

  • Spending limits: If you expect to spend a lot on the card, look for cards with high spending limits.

  • Expense management tools: Many corporate credit cards offer real-time expense reporting or other tools to track employee spending. If you want to keep a close eye on your company’s finances, look for a card that easily tracks spending.

  • Fees: Some company cards charge annual fees or foreign transaction fees. Look for a card with no annual fee or offers perks worth paying for, including access to airport lounges and significant rewards for business purchases.

The Best Corporate Credit Cards

Choosing the right corporate credit card can take time and effort. You must consider many factors, including whether you can qualify for the card, the perks or rewards points it offers, and whether it provides the spending management tools you need.

Here are some of the top choices for corporate credit cards.

  • dash.fi: dash.fi offers a unique corporate credit card that lets you create unlimited virtual cards. It focuses on digital ad spending, making it the ideal choice for online companies or businesses that do a lot of advertising on the internet. Its perks align with that goal. For example, the card offers cash back and a scaling concierge to help you save on advertising costs.

  • Blue Business Plus from American Express: This American Express card is simple, offering two Membership Rewards points for every dollar you spend, up to $50,000 per year. You get one point for every dollar spent thereafter. The card has no annual fee, and its reward points are flexible. The main drawback is that the card charges a foreign transaction fee.

  • Chase Ink Business Unlimited: This Visa credit card offers a large welcome bonus of up to $900 and has no annual fee. It also keeps rewards simple by offering straight 1.5% cash back on every purchase. Furthermore, it has a 0% introductory APR offer, giving business owners an inexpensive way to finance purchases for the first year they have the card.

  • Capital One Spark Cash: Capital One offers the Spark line of business credit cards. You can choose a fee-free card offering 5% cash back on Capital One Travel purchases and 1.5% everywhere else or a card with a $150 annual fee and offers 2% cash back on purchases outside Capital One Travel. The company even has a line of travel credit cards.

Bottom Line

Corporate cards are a valuable tool in helping manage cash flow, prevent fraud, and earn rewards. If you’re looking for a new corporate card to help manage your online ad spend, look no further than dash.fi. Learn more about how dash.fi can turn marketing costs into cash back in your bank account here.

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