9 Benefits of Corporate Credit Card Programs

By Kristina Russo | American Express^® Freelance Contributor
5 Min Read | June 30, 2021

Summary

1. Corporate Credit Cards Provide Access to Capital

With corporate credit cards, the corporation is the customer and the available credit line is determined by the company’s credit scores and payment history. This means the company can usually qualify for a larger credit line than the company owner would by using their personal qualifications for a business or personal credit card. Quick access to increased capital is always useful to a business, but especially during times of expansion and growth. Additionally, it enables companies to take advantage of “digital float” – the time between when a transaction is posted to the credit card and when the balance needs to be paid off before interest is charged. This effectively provides businesses with a grace period of approximately one month.

2. Corporate Credit Cards Enable Businesses to Scale Rapidly

Businesses often need to spend money to make money. Corporate credit cards can provide quick funding for things like inventory, equipment, or new technology. This benefit holds value for both start-up and established corporations looking to launch a new product, for example. Quick access to cash – without having to apply for a loan and wait for approval – can provide businesses with the nimbleness needed to jump on new market opportunities.

3. Corporate Credit Cards Makes Payments Easier

By using a corporate credit card, corporations can easily make procurement purchases, especially when buying online or internationally. For example, as global credit card adoption rates increase, cross-border becomes easier and faster with a credit card than traditional payment methods like ACH or wire transfer. Similarly, it’s often easier to use a corporate credit card when purchasing from online merchants. Lastly, using a corporate credit card for business-to-business (B2B) transactions can benefit vendor relationships because transactions settle faster than other payment alternatives, like waiting for a check to come in the mail.

4. Corporate Credit Cards Deliver Financial Management Tools

The benefits of corporate credit cards extend far beyond purchasing power. One way corporate credit card companies invest in the financial health of their corporate clients is through financial management tools. These tools provide clients with data to better analyze spending and more accurately project cash flow. Further, by integrating transaction data into a client’s accounting and enterprise resource planning (ERP) systems, clients don’t have to worry about manual data entry. This can provide staff with more time to focus on valuable tasks like financial analysis, while reducing the likelihood of human error.

5. Corporate Credit Cards Offer Spending Controls

Companies can set up spending controls through their corporate credit card issuer, which can help them manage costs and make it easier for employees to adhere to company spending policies. Example spending controls include:

• Limiting days and times that charges can be made.
• Limiting the number or dollar amount of certain types of transactions.
• Constraining spending to a list of preferred vendors.
• Restricting certain categories of purchases or vendors.

By configuring spending controls on corporate credit cards, a business can reduce the incidence of unauthorized spending and better manage overall expenses.

6. Corporate Credit Cards Streamline Travel & Entertainment (T&E) Expenses

When employees need to travel or entertain for business, corporate credit cards offer several benefits personal credit cards do not. For example, corporate credit cards provide greater visibility and spending control, reducing the chance employees overspend or commit fraud, even if accidentally. Digital access to corporate credit card accounts provides managers with a level of transaction detail that supersedes that of paper receipts, and employee expenses can be automatically tracked and updated.

7. Corporate Credit Cards Protect with Virtual Cards

More advanced corporate credit card issuers can provide their clients with “virtual” cards, which are single-use credit card numbers linked to the company’s corporate credit card account and generated for a specific transaction. When paying with a virtual business card, transactions are processed like physical cards, whether through entering card information into a payment gateway online or tapping a mobile device at a physical point of sale system. Virtual business cards can enhance spending control because they can be restricted based on expense type, day or time, and type of transaction. And because virtual business cards are single-use, they can be an effective way to provide contractors and other non-employees access to company funds on an ad hoc basis.

8. Corporate Credit Cards Give Rewards

Many corporate credit card programs allow a business to earn rewards based on their spending. Rewards can be a significant economic benefit, especially when a company uses their corporate credit card for general business purchasing. Rewards come in many forms, such as cash back that can be redeemed for statement credits, and points and miles that can be redeemed to ease travel costs. Businesses can max out their rewards-earning potential by choosing a corporate credit card program that offers the types of rewards that best align with company spending requirements.

9. Corporate Credit Cards Increase Employee Satisfaction

Corporate credit cards can have a positive influence on employees. For example, most employees appreciate not having to pay for business expenses out of pocket and not having to handle the tedious administrative burden required for reimbursement. Additionally, employees benefit from the increased level of protection that comes from using corporate credit cards for business activities, such as access to emergency cash advances, ease of card replacement, and reduced incidence of identity fraud. Lastly, some corporate credit cards have perks like airport lounge access and hotel upgrades which can enhance the employee-employer relationship.