Leading companies and corporations offer credit cards to their employees to promote proper integration, financial management, and values within their institutions. These credit cards are generally referred to as corporate credit cards.
Corporate credit cards, hence, are specialised payment tools. In a slight variance from personal credit cards, corporate cards offer centralised control and better financial oversight for individuals holding them.
Saurabh Puri, Chief Business Officer, Credit Cards and Lending Products at Zaggle, explains, "Unlike personal cards, corporate credit cards are designed for business use—providing centralised visibility, spend controls, and seamless integration with expense platforms. They simplify reimbursements, enhance compliance, and optimise company-wide financial management. Banks assign limits for the corporate credit cards basis the company’s financials rather than looking at individual credit profiles."
How do corporate credit cards function?
Corporate credit cards provide employees with the following benefits:
- These cards are provided to employees to cover business expenses, including travel, client meetings, and purchases related to office supplies.
- Companies receive a consolidated monthly expense bill covering all corporate credit card holders within their firm, in their corporate accounts.
- The financial health of the company determines the credit limit of these credit cards. The individual repayment capacity of an employee has no bearing on the credit limits of these cards.
- Automatic tracking of expenses of these cards is carried out through the expense management software. This also assists with the categorisation of expenses.
- Corporate credit cards also offer travel perks, cash back, and reward points. This helps companies save on recurring expenses and boost office morale.
What are the key benefits for businesses?
- Centralised control and oversight: Spending is visible in real-time, reducing the risk of unauthorised expenses.
- Improved compliance: Detailed transaction records with time and date help in audit readiness and ease tax reporting.
- Simplified reimbursements: Employees avoid out-of-pocket spending as payments are directly billed to the company.
- Flexible spending limits: Companies can restrict spending limits by category or merchant, depending on the spending patterns of a particular employee.
- Cash flow management: Extended payment cycles help optimise the company’s liquidity.
Still, before availing any corporate credit cards, there should always be proper due diligence done by the company officials, as these credit cards come with inherent risks such as:
- Possibility of misuse by an employee.
- Corporate credit cards are prone to data breaches, unauthorised transactions, and phishing.
- Unpaid balances can result in heavy interest charges and legal complications.
- Tracking employee expenses can be challenging without a proper mechanism.
- The borrowing capacity of a company can be damaged if card payments are missed.
Corporate credit cards serve as vital tools for meeting the business objectives of companies. They aim to enhance and boost financial discipline, team building, and foster trustworthy relationships among colleagues within a company.
Furthermore, these credit cards simplify expense handling and assist in maintaining detailed spending controls across the organisation; this helps them cumulatively keep track of the overall balance sheet of the company.
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Disclaimer: Mint has a partnership with fintech companies to offer credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article aims to educate readers and raise awareness about the essential needs for credit, including loans, credit cards, and credit scores. Mint does not promote or encourage taking credit, as it comes with risks such as high interest rates and hidden charges. We advise investors to discuss with certified experts before taking any credit.