How Corporate Credit Cards Work
When used wisely, corporate credit cards can definitely help businesses simultaneously achieve their career goals and reap personal benefits. On the contrary, this can lead to a corporate free fall when misused.
Corporate credit cards are different from personal and small business credit cards. These are offered only for some issuers. These accounts are generally established by companies through a banking relationship or through a deal negotiated directly with the card issuer. To develop this type of relationship, the credit of the company will be considered.
Companies can give their employees corporate credit cards to pay for business-related expenses, which are often travel-related. Although it is often issued in the name of the company, note that it may also display the name of the employee’s cardholder.
They are classified into 2: individual payment cards and company payment cards. Those who choose individual payment cards will be in charge of submitting their own expense report. In addition, they will pay the issuer directly for any charges. On the other hand, the employer will pay the bill for all changes sanctioned by the company with the company’s payment cards. But for any unapproved or personal charges, the employee will still pay the issuer directly.
Tips when using these cards
Know your company policies – Cardholders should familiarize themselves with the reporting and spending rules provided by their employers. In addition, they should inquire about the specific policies of their position or department. They need to know the rates and limits to charge. Cardholders are strongly encouraged to attend training sessions and stay up-to-date on the policies.
Learn to avoid pitfalls – In fact, there are many pitfalls that cardholders should avoid. These will include unapproved charges that can end up hitting your wallet and combining personal expenses with business expenses that can put you on a collision course with management.
Use your common sense – The lack of simple common sense is in fact one of the biggest dangers of having corporate credit cards. Before you slip it in, ask yourself if that expense is directly related to your job.
Always secure your card – Make 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 should be aware that when they lose their card, they can be provided with a new card or a new account number immediately during emergencies.
