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Guide to Choosing the Right Corporate Credit Card

Corporate credit cards can be excellent financial tools for businesses of any size from small and medium enterprises to large global conglomerates. If you are wondering what’s different about a corporate card from a personal card or are completely mind boggled by the features offered by the many variants in the market, you’ll want to read on. This guide offers an insight into how you can choose the perfect corporate credit card and what to look for in them. 

What is a Corporate Credit Card?

The purpose of a business credit card is to assist funding and enable businesses to provide services. Depending on the bank and the card, there are plenty of benefits offered like:

  • High credit limit compared to personal cards
  • Easy to separate business and personal expenses
  • Reward points or cashback earned on all business expenses
  • Extended interest-free periods, especially as introductory offers
  • Travel perks like airport lounge access, discounts at premium hotels, travel credits, easy conversion to air miles, travel insurance, membership to hotel points program etc.
  • Improved credit scores for the business
  • Overall positive effect on business, like growth in revenue or employment

What’s Different about a Business Credit Card

If you own a small business and are wondering whether to personally avail credit cards or to take a corporate credit card, first understand the difference between them.

  • The person/entity applying for the card is held responsible for that account. With a corporate card, it is most likely that a personal guarantee would be required. That person will be liable to repay debts incurred by using the card.
  • Normally, corporate cards don’t reflect on personal credit scores, as long as they are repaid on a timely basis. If there are any delays or defaults in payment, it can affect your personal credit rating.
  • Business and personal credit ratings are treated separately. A corporate credit card can help you improve the business’ credit rating.

Why Should I Apply for a Corporate Card?

A business looking to avail credit cards stands to benefit in numerous ways. The biggest advantage is the separation of business and personal expenses. Instead of using your personal card for business expenses, you will be able to track all costs better if you utilise a corporate credit card. It can help you with keeping records, tax-filing and claiming any tax reimbursements. 

Usage of personal credit card for any corporate expenses actually has the potential to be dangerous. They usually have much lower credit limits than corporate cards, so the risk of using it on huge business expenses is high. You could use up more of the limit you intend to, or even end up maxing it out. This could eventually lead to a drop in your personal credit ratings. Also, if any business problems occur, your personal scores can be dramatically affected, making it challenging for you to get a loan or credit for personal expenses like a home or a car.

What to Look for in a Corporate Credit Card?

The best corporate credit cards have varying features that can be quite subjective, and are dependent on the nature of your business. No two cards are designed equally. Having said this, here are a few general points you could keep in mind while trying to avail credit card for your business:

  • Is the annual card maintenance fee worthwhile?
    A corporate credit card tends to have relatively higher annual charges than personal cards. It’s important to weigh the benefits they offer against this maintenance charge and decide if the card is valuable to your business or not.
  • What kind of rewards does the business earn?
    Depending on the issuing bank’s partners and the nature of your business, you could easily earn rewards on all your business expenses. These rewards could be cash back or points that can be redeemed against future purchases or payments.
  • What kind of perks can the business expect?
    Before you finalise and avail credit card, make sure you compare the various offerings form the plenitude of banks providing corporate cards. You are bound to be amazed by the several options available, based on the nature of your business.
  • Does the card issuer offer good customer support?
    You’ll be surprised by how customer service displayed by your card-issuer can affect your business. Good credit card support goes a long way in making business easy for you.

When you want to select the right corporate credit card, you’ll find that there is no one-size-fits-all. Business owners would find it in their best interest to research the various features and rewards offered by numerous banks and financial agencies before they avail credit cards. For example, the Bajaj Finserv RBL Bank SuperCard is ideal for all medium to large expenses that a business might encounter, due to its 90-day personal loan facility, added security and extensive reward points system.

Just remember, like personal cards, these business cards also have monthly deadlines within which you must make all repayments to ensure your personal or business credit score doesn’t fall. When used responsibly, corporate credit cards have plenty of perks that can be beneficial to a business.

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