Guide to employee and corporate credit cards
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We often write about the best small-business credit cards for people with businesses of any shape and size. But this can be confusing, as some readers also have corporate (or employee) credit cards as part of their full-time jobs.
Although there are differences between business credit cards and corporate credit cards, the cards function in very similar ways. In this post, we’ll explain employee and corporate credit cards and how they differ from the business credit cards we often discuss.
How corporate credit cards differ from other business credit cards
Simply put, corporate credit cards differ from small business credit cards in that they are intended for larger organizations. While most folks can get approved for a business credit card with just a few hundred dollars of monthly (or even annual) revenue, many corporate cards have much larger spending and revenue requirements.
For example, some corporate cards will only approve businesses with annual revenues totaling at least seven figures. And while corporate credit cards and business credit cards both support adding employee cards, the requirements are (once again) stricter when it comes to corporate employee cards.
Best small business credit cards that offer employee cards
|Issuer||Limit on the number of employee credit cards you can get?||Annual fee on employee cards?||Employee spending controls?||Itemized spending breakdown per employee?|
|American Express||Yes||Fees vary||Yes||Yes|
|Chase||No, but commercial cards recommended if you need more than 100 cards.||No||Yes||Yes|
|Capital One||No, but may offer a “different approach” after 75 cards.||No||Yes||Yes|
|Bank of America||No||No||Yes||Yes|
As you can see each issuer handles employee cards a bit differently, whether it be with regards to the number of employee cards you can get to whether there’s a fee for an employee card.
For example, if you have the Ink Business Preferred Credit Card, you can request unlimited free employee cards to help better manage expenses. Eligible employee cardholders will also be covered under the Ink Business Peferred’s cell phone protection benefit.
If you’re a small business owner holding The Business Platinum Card® from American Express, on the other hand, you’ll pay anywhere from $0 to $300 per year for an employee card, depending on which type of Amex business card you choose for the employee.
An employee Amex Business Platinum card, for example, has a $300 annual fee (see rates and fees). Whereas getting a Business Green Rewards Card from American Express for your employee comes with a $0 annual fee (see rates and fees).
The information for the Amex Business Green has been collected independently by Million Mile Secrets. The card details on this page have not been reviewed or provided by the card issuer.
Best practices for companies
For companies that choose to use corporate and employee credit cards, here are a few best practices for making the most of your corporate cards.
How many employee credit cards should I get?
In general, we recommend you get as few employee credit cards as necessary. If you can have teams or departments share a single card, this can be helpful, as it will save you annual fees and reduce your overall exposure (i.e. cards getting lost or misused).
At many organizations, employee credit cards are only necessary for folks who consistently travel, interact with clients (for meals or business meetings) or purchase supplies and materials for the business. Outside of these roles, most folks should make the occasional purchase on their credit cards and then file for reimbursement from the payroll department.
Establish limits on spending
In addition to getting fewer corporate credit cards, you can also impose spending limits on your employee cards. This applies to both small-business cards and corporate credit cards, and we recommend that any business owner use employee spending limits to reduce liability.
Depending on how the cards will be used, you can select different preset spending limits for each card or a standard limit, like $500 or $1,000, etc. to be imposed on each card across the board. This sets expectations for employees and ensures you carry as little risk as is possible while still allowing employees to make necessary purchases.
Make expense reports as easy as possible
When all purchases accumulate on the same business or corporate credit card account (even if they are charged on different employee cards), total spending can be analyzed and viewed in a single transaction history.
This makes expense reporting simple, as all purchases need to be accounted for — and no business purchases should have occurred outside of the employee credit cards. This is a significant benefit for businesses wanting to streamline and simplify their business expenses.
Require approval when necessary
Finally, some card issuers will allow you to temporarily remove purchase restrictions. This can be valuable in case of large purchases that should require prior approval (from a boss or finance manager) before an employee spends more than a predetermined amount.
Obtaining employee credit cards
After signing up for a business or corporate credit card, adding employee credit cards is typically an easy process. Read our post about how to qualify for a business card.
After you’re approved (fingers crossed!), most banks will provide the option for you to add employee cards immediately. Sometimes, like with Amex, you can even do so during the application process.
Should I get employee cards for my business?
I love the ease and organization of having separate employee cards that can be used to make business purchases. The streamlined reporting of purchases (on a single statement) offers me peace of mind and simplicity for any and all business expenses.
That being said, many business cards (and more corporate cards) carry annual fees for employee cards, so you should evaluate whether the organization and streamlined process is worth the annual fee for each card (typically in the ~$50 to ~$300 per card, per year range). Whether the benefits outweigh the costs is a personal business decision that needs to be considered by each organization.
Best practices for employees
As an employee, business and corporate cards certainly have their pros and cons. While it’s nice to earn miles and points for your business expenses (especially when you get reimbursed), waiting for payroll to pay off your cards can be a frustrating experience.
If you are an employee cardholder, here are a few tips on the best practices you should try to implement.
Keep receipts in order
First and foremost, be sure to always keep a physical or emailed receipt for any business expenses. Although you can sometimes get reimbursed without a receipt (typically for purchases under a certain threshold), the expense report process is significantly easier when your purchases are well documented.
Be mindful of compliance procedures
As an employee, keep in mind that specific compliance procedures sometimes limit what can be considered a reimbursable expense. Be sure to check with your human resources or accounting/finance representatives to ensure you’re not purchasing anything that goes against compliance and would leave you on the hook for your purchase (ie gambling, alcohol, gifts for clients or other sometimes questionable purchases).
Use your best judgment
Finally, remember to use common sense when purchasing anything on the company’s dime. You may be entitled to treat clients to a fancy dinner, but as a general rule, be mindful about which restaurant you select or how many desserts you order.
If you have any questions about “judgment calls” when it comes to expensing purchases on the company card, it’s better to ask for permission than to get stuck with a hefty bill if asking for forgiveness doesn’t work out.
Though corporate credit cards and small business credit cards function similarly, they can be quite different in terms of the approval process, fees and use cases. For folks with larger businesses, corporate credit cards with separate employee cards may make the most sense. These often carry heftier annual fees, but the organizational benefits may be worth the additional charges.
For anyone with a smaller business or simpler financial processes, business credit cards with no-fee employee cards may be a wiser decision.
Ultimately, any type of separation and organization for all your business expenses can be a valuable way to streamline your business.
Do you currently have an employee credit card or a corporate credit card? Which did you get and why?
For rates and fees of the Amex Business Platinum Card, please click here.
For rates and fees of the Amex Business Green Card, click here.
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