An Introduction to Corporate Credit Cards
If you are a director of a company or own one yourself, a corporate credit card may just be the right choice for you, as it brings about many advantages.
How Does a Corporate Credit Card Work?
Corporate credit cards, which are also often referred to as commercial credit cards or business credit cards, are – as the name implies – specifically designed for corporates or businesses.
In general terms, a corporate credit card has the same basic function as any other conventional credit card – it is used as a payment tool allowing for cashless transactions. And like any other card, it commonly includes a reward program which offers you a range of different privileges.
The one main difference is: Corporate credit cards are used by companies and issued to selected employees. That way, the nominated staff can make payments using the company’s credit card account.
Advantages of Corporate Credit Cards
The greatest benefit of corporate credit cards is their ability to optimize a company’s financial processes. A company can save a lot of time in processing claims and reimbursements by giving out corporate credit cards to key employees, such as senior management, directors, or any other employee whose job includes frequent purchases.
In addition to that, corporate spending can easily be controlled by setting different credit and spending limits for different employees holding a corporate credit card, depending on their respective position and department.
The best thing is, all transactions with the corporate credit cards count for the card specific reward program, which in turn allows the company to obtain certain privileges, such as cash rebates or discounts and thus helps to save additional costs. Some credit cards even include free travel insurance coverage when purchasing a ticket with the corporate credit card, rendering it unnecessary to sign up for additional travel insurance if the cardholder has to travel overseas on a business trip.
Last but not least, a corporate credit card serves as a great financial tool to integrate corporate purchases into a company’s survival on credit. Especially in financially tough times and when cash is low this comes in handy.
Consider this example to illustrates the convenience of a corporate credit card:
In a conventional claims process, an employee who has been nominated to make purchases on the company’s account would:
1. Pay for the business items out of his or her own pocket
2. Keep the receipts
3. File for reimbursements at the end of every month or quarter. Therefore the employee has to file forms for the immediate superior to authenticate the purchase and the Management to approve it. All the forms and receipts are then processed by the Administration Department.
4. Wait for a certain period of time while his check is being prepared and finally disbursed.
If the same employee had a corporate credit card, he would simply make the business purchases using the company-issued card and the credit card bills would then be handled by the relevant finance personnel at the end of the month.
How to Sign Up for a Corporate Credit Card?
Corporate credit cards are offered by most banks in the Philippines. To sign up for one, a company needs to fulfil certain criteria, which can be different from bank to bank, but which notably includes the company’s financial standing.
To file an application, the following documents are generally needed:
• Photocopies of the passport or identity card of the designated employees
• The company’s latest bank statements
• The company’s latest financial statements
• (For limited / private limited companies) Board of Directors’ Resolution
• (For partnership companies) Letter of Authorization
You can apply for a corporate credit card personally by visiting a bank. Or you can use iMoney’s credit card comparison table and do it online for FREE.
Note that there usually is no limit to the number of employees that can be nominated for a corporate credit card, as long as the company’s total assigned credit limit is not exceeded.