Corporate and company credit card are excellent short-term business financing options. They not only provide companies – and their employees – with quick access to capital, but they also usually provide rewards programs, perks, and other benefits such as expense management tools.
However, each of these cards has its own set of requirements. Understanding the distinctions between the two can help business owners determine which card type is best for their needs.
Business Credit Cards
A corporate credit card, or SME corporate cards, as it has been popularly termed, allows business owners or specified employees to pay for company expenses such as equipment purchases and other office expenses.
Business credit cards typically allow cardholders to earn points or cashback for eligible purchases. While they function similarly to personal credit cards, card lenders usually offer higher credit limits and more lucrative rewards because businesses spend more and for the underwriting process business financials are also considered.
These cards are used mainly by small business owners to manage their essential expenses. The application process for these cards is simple but requires a credit check and proof of ownership of the business.
Company Credit Card
A company credit card is issued to corporates for its employees to pay for business costs using the firm’s credit card account.
While some issuers offer company credit card for startups and SMEs, they are traditionally reserved for companies with annual revenues above $4 million.
Company credit cards allow for more authorized employee cardholders than corporate credit cards, and card issuers may even require that a certain number of employees use them.
Here are some of the most significant differences between the two:
An SME corporate cards is available to businesses of all sizes, sometimes including gig workers. There are typically no minimum spending limits, team size, or business revenue requirements.
On the other hand, a company credit card is only available to a defined set of companies, with issuers setting strict requirements for annual revenue, spending quota, and team size.
The corporate credit card issuer performs a credit check only for the business owner, who will be personally liable for all the debt, regardless of whether the card was used by the business owner or an authorized employee.
The authorized employees may be held responsible for any unauthorized expenses for company credit card and will be subjected to credit checks. Moreover, the personal liability of the business owner may not be required.
Business credit cards usually offer cashback and curated business rewards. They also give travel benefits, lower foreign markup fees, and interest-free credit periods.
Company credit card issuers give less focus on rewards, which are generally kept by the company. However, as these cards are more complex than corporate credit cards, the issuing company keeps dedicated relationship officers to support them.
Business and company credit card are great options for companies to fulfill their financial requirements. Choosing one from another mainly depends on the type of business, team size, volume of transactions, and the monthly spending limit.
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