Choosing the right corporate credit card can be challenging, mainly because they’re many different cards, each with benefits and drawbacks. Thus, before selecting a credit card for business, you must understand what makes one type of Card better than another to decide which one suits you best.
Below, I will go over some tips that can come in handy when choosing the right corporate credit card.
Ask about the Payment and Credit Terms
Your corporate credit card’s payment and credit terms will determine how long it takes to pay off the balance.
Payment Terms
The shortest payment terms are usually 14 days, followed by 30 days for most major banks and 60 days for smaller lenders. The longer the time, the more interest you’ll pay on this amount (and vice versa).
Credit Terms
Most corporate cards have a grace period of 30 days, after which any outstanding balance becomes past due if not paid in full within that time frame.
However, the grace period varies between banks, so it’s essential to check before signing up with one company over another–or even ensure your bank has an established policy regarding related issues like late payments and fees!
Think about Employee Expenses Tracking
One thing you should consider when choosing a corporate credit card is how your business will use it.
To track employee expenses and report them accurately, you’ll need to know how much each employee spent on their corporate-related purchases and how much they paid.
You can choose from two accounts: cash advance—or debit cards.
Cash advance cards allow you to make purchases directly from your bank account by linking them with the company’s checking account (which is where all employee payments should go). You can decide to automate your business to make accounting easier.
On the other hand, a debit card can be helpful if you don’t want any interest charges because of late payments or additional fees associated with your existing checking account.
Debit cards are great for business owners who need quick access to cash. These accounts offer a low annual fee and no balance transfer fee, but they come with a high-interest rate that can add up quickly if you don’t pay off your monthly balance.
Does the Card Have a Rewards Program?
Rewards programs are a great way to encourage employees to use their corporate credit cards. They can reward employees for purchases, loyalty, or other activities.
Rewards programs also encourage employees to use their corporate cards for business purposes like paying bills or making purchases on behalf of the company.
Suppose you want your company’s employees to get involved in your rewards program and contribute back positively. In that case, choose a card with a good rewards structure, high return rates, and generous spending limits at relatively low-interest rates (so there’s less risk).\
Adding New Cardholders
Can you easily add new cardholders as your business grows and change credit limits for individual cards?
This tip is two-fold:
Can you easily add new cardholders as your business grows and change credit limits for individual cards?
The ability to add new cardholders as your business grows is an essential feature of any corporate credit card. In addition, it allows you to manage your monthly expenses by expanding the number of people who use the payment method rather than having them pay for each other’s purchases.
Can you change credit limits for individual cards?
Suppose multiple employees within your company need access to different financial services–such as cash advances at ATMs versus overdraft protection at banks.
Managing these accounts individually in one place ensures everyone knows what they’re entitled to when purchasing something using funds from existing accounts.
On the other hand, having too many accounts scattered across multiple systems could confuse who gets what type of service (and which ones aren’t covered).
Choose a Corporate Credit Card Suited to Your Organizational Needs
When choosing a corporate credit card, consider your unique corporate needs.
For example, if your company has a high volume of monthly transactions and you have been using cash to pay bills, consider choosing a card with an excellent rewards program and other incentives.
Additionally, remember that although these tips can help you choose a credit card that serves your company’s best interest, many other factors can affect whether or not a particular credit card is right for you. That’s why performing a credit card comparison is essential: it ensures the corporate Card you settle on serves your interests.
Conclusion
Corporate credit cards are great, but like any financial tool, making an informed decision is essential before choosing a corporate credit card for your firm.
Remember that corporate credit cards work best for firms with significant expenses but can benefit all businesses if used responsibly.