When used wisely, corporate credit cards can definitely help businesses simultaneously achieve career goals and reap personal perks. On the contrary, this can lead to a corporate free-fall when used poorly.
Corporate credit cards are different from both personal and small business credit cards. These are offered only be a few issuers. Generally, such accounts are established by businesses by utilizing a banking relationship or through a deal negotiated directly with a card issuer. In order to develop such kind of relationship, the company’s credit will be considered.
Companies may give their employees with corporate credit cards for the payment of business-related expenses, which are often travel-relation. Though it is often issued in the company’s name, be aware that it can also display the name of the employee cardholder.
They are categorized into 2 – individual payment cards and company payment cards. Those who opt for individual payment cards, they will be the ones responsible for submitting their own expense report. Also, they will be paying the issuer directly for any charges. On the other hand, the employer will pick up the tab for all company-sanctioned changes with the company-payment cards. But for any personal or unapproved charges, the employee will still pay the issuer directly.
Tips When Using These Cards
Be aware of your company’s policies – Cardholders must familiarize themselves with the reporting and spending rules provided by their employers. Also, they must educate themselves about the policies specific to their position or department. They need to know the types and limits on making charges. It is highly recommended that cardholders must attend training sessions and be updated on the policies.
Learn how to avoid pitfalls – There are indeed a lot of pitfalls cardholders must avoid. These will include the unapproved charges that can end up hitting your wallet and combining personal expenses with business spending that may put you on a collision course with the management.
Use your common sense – The lack of simple common sense is indeed among the biggest dangers from having corporate credit cards. Prior to swiping it, ask yourself if such expense is directly related to your job.
Always secure your card – Be sure to keep your card in a safe place to avoid theft or loss. Immediately after noticing that you have lost it, report it to the authorities. This will help prevent fraudulent charges. Cardholders must be aware that when they have lost their card, they can be provided with a new card or new account number immediately during emergency cases.