How To Get A Corporate Credit Card For Your Business
Learn how your large business can benefit from the tailored perks and rewards of a corporate credit card, and find out how and where to apply.
A corporate credit card can help your company save both time and money. If your company spending or business purchases go unrewarded, your employees frequently travel for business, or you’re simply tired of dealing with pesky expense reports, a corporate credit card pays you back for common business spending while helping your business manage its expenses.
In this article, we’ll explore exactly what corporate credit cards can do for your business. We’ve conducted hours of research — both by trawling the web and by talking to industry experts and decision-makers — to uncover the best way for companies to pursue a corporate credit card. Read on for the details.
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What Is A Corporate Credit Card?
Corporate credit cards work similarly to normal credit cards in that they are used to make purchases on credit, which must then be paid off over time or by the next billing cycle. Corporate cards also offer valuable spending rewards just like normal rewards credit cards, but often at higher rates.
Corporate credit cards differ from normal credit cards because they also offer companies spend tracking tools, employee cards connected to the corporate account, and more perks designed to fit the needs of large organizations.
How Is Getting A Corporate Card Different From Getting A Business Credit Card?
Corporate cards tend to be specifically targeted at either large companies or well-capitalized tech startups. As such, most smaller businesses (such as sole proprietorships or unincorporated businesses) won’t benefit from corporate cards — and may not even be eligible to apply. If this applies to you, we recommend looking into some of the best small business credit cards instead.
How To Get A Corporate Credit Card
Getting a corporate credit card differs somewhat from the process of getting a business credit card. This step-by-step guide will help you understand what to expect when applying for a corporate credit card.
1) Determine If You’re Eligible To Apply For A Corporate Card
One of the key things we’ve found in our research is that while some eligibility requirements for corporate credit cards vary by card, many requirements are the same. One common requirement is that your business must be a corporation. Specifically, your business must be formally incorporated as an S-corp, C-corp, or LLC. For more information on what this means, check out our guide to different types of business structures.
Note that this requirement, while common, is not universal. For example, the Divvy corporate card can be obtained by sole proprietors and other non-incorporated business types.
Other stipulations may be more varied. For example, American Express requires corporate cardholders to operate with at least $4 million in annual revenue. Meanwhile, Brex requires that cardholders have at least $50,000 in the bank for some product lines. Others might require expected annual credit card charges of at least $250,000, a minimum number of card users within a company, or that a company has at least one year of business history.
These stringent requirements aren’t too shocking. Because corporate card issuers will be dedicating premium customer support services to your company — and with no personal guarantee attached to your credit line — they’re looking for businesses with serious clout.
2) Consider The Pros & Cons Of Getting A Corporate Business Credit Card
- Streamline your company’s incidental and travel expenses
- Protect your personal assets
- No personal guarantee required
- Tracking and controlling employee expenses
- Businesses must generally be well-established or well-funded
- Eligibility requirements extend beyond personal credit
- Need to demonstrate good corporate accounting practices
Here’s a more in-depth look at the pros and cons of corporate cards.
3) Check Your Business Credit Score
Because corporate cards don’t hold any single person personally liable, issuers won’t look at personal credit histories during the approval process. Instead, an issuer might consider your company’s business credit score.
Unfortunately, you cannot obtain a free business credit report from the major credit bureaus. Luckily, there are plenty of affordable services that provide you with access to your business credit report, including Nav, Dun & Bradstreet Credit Insights, and Experian.
Fundamentally, a business credit score functions similarly to a personal credit score.
4) Know About The Types Of Corporate Cards Available
A trickier aspect of corporate credit cards is the various ways issuers structure corporate card liability. Let’s break it down:
- Corporate Liability: The company is solely responsible for all debts incurred. The company receives the bill directly from the card issuer. The issuer will not check your employees’ credit.
- Individual Liability: The employee using the corporate card is responsible for the debt incurred on the employee’s corporate card. The employee must pay the bill and then request reimbursement from the company. This arrangement requires that the issuer run a “soft pull” of the employee’s credit so that the employee’s credit score won’t take a hit.
- Joint Liability: Both the company and the employee are responsible for the debt. Under this arrangement, an employee’s personal credit will be unaffected if their corporate card is paid in full within a set number of days. However, if a payment is missed or late, the issuer reports the delinquency to the credit bureaus, and the employee’s personal credit score is affected.
Individual and joint liability programs pass more of the credit risk on to the employee, while corporate liability insulates employees from this type of risk. In some cases, you may be able to choose which type of liability your corporate card program follows.
5) Decide What Features You Want For Your Corporate Business Credit Card
With traditional issuers, corporate credit cards are not offered as a packaged deal (compare that to the rigid, unnegotiable perks of personal or small business credit cards). The type of business that is eligible for a corporate credit card likely has unique and specific needs, and can typically cut a deal with a corporate card issuer that is specific to those needs. Two businesses could therefore use the same corporate credit card but have completely different terms.
With modern fintech issuers like Brex and Ramp, corporate card products are generally less flexible. These newer card issuers offer a specific set of rewards programs, tools, and other features for their corporate cards. This doesn’t mean these cards aren’t somewhat flexible; you’ll still be able to customize employee spending rules, for example.
6) Find An Issuer To Work With
Corporate credit cards have been traditionally issued by large banking institutions — longtime bigwigs American Express, J.P. Morgan, and Capital One all offer a variety of corporate cards. In general, banking institutions provide a number of different corporate card product lines to suit an array of companies. These institutions have also been around for a while, which could provide a solid level of security.
That said, there is a new crew on the scene: fintech startups. The cast of newcomers includes Brex, Divvy, and Ramp. Credit card processing company Stripe also offers its own corporate card. Fintechs provide robust software suites meant to help manage a company’s spending. They can also be more nimble in times of crisis. Brex, for example, tweaked its rewards scheme to better suit transitional at-home workforces during COVID, while Divvy worked impressively to help get customers PPP loans.
“Large credit card companies have been feeling the pressure from these fintech companies, and have been forced to develop similar services and features to try and compete,” Panteli said. “Divvy, Ramp, and Brex offer everything you could ever need from a corporate credit card, including great rewards, low fees, and a modern environment.”
7) Create Guidelines For Employee Use
We’ve found that one of the main reasons businesses use corporate credit cards is to streamline employees’ work-related spending. This requires you to issue guidelines for how employees use the corporate card account, as corporate credit cards allow you to monitor and control employee spending.
“Building a spending policy with your team up front is key, as is meeting the policies to ensure that employees fully understand your expectations on spending and reporting,” said David Aylor, a South Carolina-based lawyer who uses corporate cards for his business. “The work isn’t done there — spending policies should be revisited and reviewed semi-annually or annually and adjusted as needed to your changing business structures.”
You can place controls on the types of expenses and merchants for which employees can use the card, and you can limit how much your employees can spend, either overall or on a per-transaction basis. Employees generally pay the card issuer directly for any unapproved charges.
Be sure that the guidelines you establish for your employees make sense given the nature of your industry and the expenses your employees are likely to incur during their duties.
FAQs About How To Get A Corporate Credit Card
Find The Right Corporate Credit Card For Your Business
Corporate credit cards have traditionally been an elite product for large, stable businesses with numerous employees. However, some up-and-coming fintech companies like Brex, Divvy, and Ramp are shaking up the scene by making it easier than ever to snag a corporate credit card. Whether you apply with an old-school issuer or one of these newcomers, expect more involved processes to apply, implement, and use a corporate card than you’d find with a personal or small business credit card.
Think your business is a good fit for a corporate credit card? Take a look at the best corporate credit cards as determined by Merchant Maverick. We also recommend learning the best tips for managing a corporate card.
If you’re not quite ready for a corporate credit card, consider a small business credit card or even a personal credit card instead — though if you go the latter route, read up on how to use personal credit cards for business expenses.