Corporate credit cards are an ideal alternative for businesses looking for interest-free credit and easy monitoring and reporting capabilities to help keep finances under control. However, not all businesses are eligible for corporate credit cards, which are designed for businesses with higher annual revenue and spending. For smaller to medium-sized businesses, a business card is more suitable. Although they both offer similar benefits including short-term credit availability, and exclusive benefits, they are not interchangeable.
In this article, we will explore how corporate credit cards are different from business cards in the way they work and their benefits.
What is a Corporate Credit Card?
A corporate credit card is a credit card that organizations issue to their employees to manage business-related transactions like hotel stays and flight tickets.
Corporate credit cards are designed to allow companies to manage larger business expenses without worrying about the credit limit. Empowering companies to centralize their expense management, these credit cards allow automated expense tracking and spending restrictions. Companies can have greater control over how employees use corporate credit cards for business spending.
Corporate credit card is an ideal financial tool for organizations that have high expense volume, which calls for efficient optimization of cash flow.
What is a Business Credit Card?
A business credit card is just like a personal credit card but for a business entity. Companies can use these cards to purchase office supplies, pay utility bills, and other business expenditures. In return for the usage, users get access to a number of benefits such as loyalty points, cashback, and other perks. Business credit cards offer higher credit limits to businesses when compared to personal credit cards, but lower than corporate credit cards. These cards also offer features to track spending, manage employee cards, and set spending limits.
Differences between Corporate Credit Card and Business Card
Eligibility Criteria for Corporate Credit Card
To get a corporate credit card, businesses must possess audited financial statements to validate their financial history and show that they are capable of managing cash flow responsibly. They must also meet a minimum annual revenue criteria to prove consistency in their income. Creditworthiness of an organization also plays a critical role in acquiring a corporate credit line. It means your company name shouldn’t be on any defaulter’s list. If you make late payments or have paid penalties for missing due dates, then your chances of getting a corporate credit card are slim.
Eligibility Criteria for Business Credit Card
To get a business card, the business owner is investigated for creditworthiness instead of the organization. Card issuers evaluate the entrepreneur’s credit score to understand their ability to manage personal finances. As an owner, if you have a good credit score, the chances of you getting a business credit card are higher due to minimal risk. Also, the company must be operational for at least a year to exhibit stability in generating revenue.
Features of Corporate Credit Card
- With a corporate credit card, you can configure customized rules for every employee to control how they use the card.
- Simplified expense monitoring and tools to identify spending trends to identify cost-saving opportunities by weeding out irregularities.
- Proactive fraud detection and prevention through real-time visibility into expense management and enabling seamless reconciliation.
- Reduce administrative and operational overhead through instant online and touchless payment options.
- Automate end-to-end expense management through streamlined integration with third-party finance apps to centralize your spending.
Features of Business Credit Card
- Avail perks like travel insurance, free access to airport lounges, and exclusive office supplies discounts.
- Leverage spend management features to track expenses by categorizing them into buckets, and generating reports for enhanced insights.
- Protect your expense management from fraud with real-time alerts, and dispute resolution services.
Corporate Credit Card vs Business Credit Card
Let’s understand the differences between these two types of credit cards based on some key parameters.
| Parameter | Corporate Credit Card | Business Credit Card |
| Eligibility criteria | Businesses with high revenue | Businesses of all sizes can apply for this card |
| Threshold requirements | Revenue and employee count are important | Revenue and employee count are not important |
| Creditworthiness | Creditworthiness of business is essential | Creditworthiness of a business owner is evaluated |
| Expense tracking | Advanced tracking & monitoring features are available | Basic tracking capabilities are offered |
| Exclusive benefits | Exclusive discounts & perks offered | Exclusive discounts & perks offered |
| Liability | Corporation owns the debt | Business owners are responsible for debt repayment |
Conclusion
Corporate credit cards are an essential financial tool that helps companies navigate market competition regardless of economic situation. They give financial freedom through short-term and interest-free credit while allowing them to be financially prudent. However, these benefits can be maximized only with the right corporate credit card like Yes Bank Zaggle Corporate Card. It comes integrated with the spend analytics solution Zaggle Zatix. Some of its features are:
- Visibility into business-wide expenses to identify cost-saving opportunities
- Easy card management including balance tracking to minimize admin overhead
- Enforce corporate expense policy to avoid budget mismanagement
- Assess supplier performance and renegotiate better terms
Learn more about Zaggle corporate credit cards here.