You need a corporate credit card if your company experiences significant expansion. You have additional employees to manage, vendors to pay, supplies to order, and there are travel needs.
Thinking of how to get a corporate credit card? Or unsure of what a corporate credit card is? If the above questions trouble your mind, you are right in time. This article walks you through the whole summary of corporate cards. Dig deeper if you are eager to know more.
To Know What a Corporate Credit Card Is:
- Understand the Concept of Corporate Credit Card
- Know How a Corporate Credit Card Works
- Know the Pros and Cons of a Corporate Credit Card
- Understand What Distinguishes a Corporate Credit Card from a Regular Business Credit Card
- Find Out How to Qualify for a Corporate Credit Card
- Learn How to Apply for a Corporate Credit Card
- Understand How to Manage a Corporate Credit Card (After a Successful Application)
Ready? Let’s unravel things point by point.
1. Understand the Concept of Corporate Credit Card
To know what corporate credit cards mean, understand the concept of a corporate credit card.
A corporate credit card is a revolving line of credit attached to a business credit card, with a significant twist: There’s no set credit limit, but you must pay in full whatever you charge on the card during the preceding period. In other words, you aren’t allowed to carry balances from one month to the next, as you would for a regular personal or business credit card.
Use corporate credit cards only if you are running a large-scale business. Understand that corporate credit cards are for businesses and large incorporated companies rather than
small business owners—unless the owner has the financial wherewithal to handle a corporate credit card.
A corporate credit card has no personal risk—the issuer doesn’t for an owner’s personal guarantee—and is good for reporting and record-keeping. Additionally, you can set spending limits and also enjoy special benefits like travel and emergency assistance services.
However, prepare to run the card on a high APR between 13% and 20% if you ever carry balances on a corporate credit card. Also, ensure you set a strict and clear company credit card policy to prevent your employees from abusing the company finances, which may bounce back on your business.
2. Know How a Corporate Credit Card Works
To learn what a corporate credit card involves, understand how it can benefit your business. Use corporate credit cards to control spending and maintain visibility. Get access to capital using a corporate credit line to make your business scale higher.
You also have access to financial management tools, which you can use to track your expenses and thereby reducing the chances of human error. Corporate credit cards also optimize travel and entertainment costs. Your business can also enjoy rewards and employee satisfaction.
3. Know the Pros and Cons of a Corporate Credit Card
To have full awareness of a corporate credit card, research the upsides and downsides of getting the card. Evaluate the need for your company to run on a corporate credit card and check your qualification.
Check if you have enough credit history and the possible rewards you can get for applying for a corporate credit card.
Before running your business on a corporate credit card, knowing its advantages and disadvantages can do you more good than you think. One of the goods is that you have a better grounding for making the right decision in choosing the best corporate credit card for yourself.
- Pros of a Corporate Credit Card
- Track and analyze your business-related purchases with ease.
- Enjoy direct benefits and rewards from using the card to boost your business.
- Get access to dedicated or 24/7 customer service representatives from your issuer.
- Maintain financial etiquette by preventing yourself from making personal charges on a company card through the use of a corporate credit card.
- Cons of a Corporate Credit Card
- Prepare for a quick add-up in additional cardholder fees.
- Not an option for smaller companies.
- No personal rewards for employees as there are with personal cards.
- Prepare for a tough application process.
>>>PRO TIPS: How Do Small Business Credit Cards Work
4. Understand What Distinguishes a Corporate Credit Card from a Regular Business Credit Card
To comprehend what a corporate credit card entails, understand its differences from a regular business credit card.
A corporate credit card falls into the category of a business credit card, but it is not just a common business card. While a business credit card works for all types of businesses (sole proprietorships, limited liability-type entities, and corporations), a corporate credit card is more suitable for midsize to large LLCs as well as corporations.
Unlike the business credit card, which has no definite bearer, a corporate credit card places the responsibility solely on your business. The corporate card helps your company improve spending controls, helps the payment process, and gives long-term value.
5. Find Out How to Qualify for a Corporate Credit Card
To fully comprehend what a corporate credit card is all about, understand how you can qualify for one.
To qualify for a corporate credit card, apply directly to a credit card issuer—such as your bank or credit union—and as you are applying, prepare for lengthy application processes. You may have to submit supporting documents to prove that your income and expenses justify obtaining a corporate line of credit.
Be ready for a formal review because the application may include a financial audit. In addition, possess a high business credit score and ensure the annual revenue for your business is in the millions. Also, ensure that your company controls at least a dozen or more employees with the authority to make decisions for your company. In addition, incorporate your business as a S corporation, C corporation, or limited liability company (LLC).
>>>GET SMARTER: Business Credit Cards: How to Qualify for One
6. Learn How to Apply for a Corporate Credit Card
To fully grasp what a corporate credit card means, understand how you can apply for one. Begin the application by visiting the card issuer’s website. Provide documents that verify your business’s name, type, and size.
Also, provide your company’s financial statements, such as its annual revenues, to show your company’s financial status.
7. Understand How to Manage a Corporate Credit Card (After a Successful Application)
To understand how a corporate credit card works, learn how to manage a corporate credit card. Establish spending policies for all your employees and ensure they submit all receipts, expense reports, and other necessary documents immediately.
Use expense reporting tools to monitor and manage your expenses. Also, employ an accountant to manage your business’s budget for you.
Conclusion
To know what a corporate credit card is, get the whole idea of what a corporate credit card entails and understand how you can use it. Research the upsides and downsides of the corporate credit card and also know what makes it unique from a regular business card.
Then, find out how you can qualify for a corporate credit card and the steps to applying for a corporate credit card. Finally, learn how to run a corporate credit card after your application gets approval.
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