Corporate Credit Cards: How They Work, and Differences vs. Business Cards
Corporate Credit Cards: How They Work, and Differences vs. Business Cards
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While small business credit cards typically require a personal guarantee, corporate credit cards do not. However, corporate credit cards are only intended for large businesses, and usually require your business to have an annual revenue of over $4 million.
The information related to the The Hilton Honors American Express Business Card and American Express Blue Business Cash™ Card has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication.
Corporate cards are less risky for individual cardholders, since responsibility for debt is tied to the company the card is issued to (and possibly employee cardholders who make unauthorized purchases) — not any one individual.
That said, you should only get a corporate credit card if you are a major corporation who can easily meet the eligibility requirements for a corporate card. All other business owners should opt for a business credit card, which is largely the same, but requires a personal guarantee.
Corporate credit cards vs. business credit cards
Business credit cards
Corporate credit cards
|Eligibility||Available for all types of businesses, including freelancers and sole proprietors||Only available to corporations:
|Personal guarantee required|
|Set spending limits for employee cards|
|Expense tracking and accounting tools||Basic||Advanced|
|Offers rewards on spending||Rewards are intended to reinvest in business|
|Offers business perks and benefits|
What are corporate credit cards and how do they work?
Corporate credit cards are designed for companies with numerous employees and enormous annual revenue, usually requiring a minimum of $4 million. These cards anticipate a high number of authorized users and don't require a personal guarantee, meaning that if the company goes under, no single individual is responsible for debt accrued; instead, it's on the business itself.
Stricter eligibility requirements
Corporate credit cards are best for corporations:
- With an annual revenue of at least $4 million
- With a high number of employees to spend on company credit cards
- Who can meet the strict eligibility requirements
- Can often benefit from these types of cards
A major difference between small business credit cards and corporate credit cards is that anyone can apply for a small business card, while corporate credit cards have much more stringent eligibility requirements.
For example, corporate credit cards can only be acquired by S-Corporations, C-corporations and LLCs with a pre-established business credit score. You'll also typically need to have a certain amount of employees, and a high annual revenue, as we mentioned previously.
Corporate credit cards are often equipped with powerful analytics tools that allow company accountants and managers to keep a better grasp of where money is being spent. Banks such as Capital One or American Express allow their business clients to set up different tracking options — whether it be by department or different vendors. Having this level of control is also important when it comes to reconciliation and reimbursement.
Because corporate credit cards are often issued to a large number of employees, keeping track of the different spending can become difficult. As your company grows and expands, corporate credit cards are designed to scale with it, making sure your company doesn't lose any control of its expenditures.
Rewards geared for large corporations
Much like with business credit cards, corporate credit cards often earn rebates and rewards on their spending, in the form of cash back, points or miles, and can come with perks like airport lounge access, Global Entry and TSA Precheck credits and more.
These rewards, however, are typically credited back to the main company account. Most issuers also offer non-rewards options, specifically meant for large companies and nonprofits (with revenue of more than $10 million) that have internal corporate policies preventing them from taking in this kind of revenue or price reduction benefits.
How does a corporate credit card impact your credit score?
Much like with a personal or small business credit card, the responsible use of corporate credit cards by a corporation will positively affect the credit score of the business. This means paying the balance of all company-issued cards in full and on time each month. Failure to do so will result in a negative impact on a business's credit score.
However, if you are an employee about to be issued a corporate credit card, some issuers may run a credit check against your personal history. This hard pull on your credit history will have a temporary impact on your FICO score, though it is minimal. However, late payments and delinquencies on the company's side will not negatively impact your credit score. As an employee, it's important to follow your company's policy on spending on company cards and never use a corporate credit card for personal expenses to avoid running into trouble.
What are business credit cards and how do they work?
Business credit cards allow small business owners and their authorized users to charge all their business expenses to a business account. The primary difference between business credit cards and corporate credit cards is that business credit cards typically require a personal guarantee, meaning the business owner is personally responsible for all expenses charged to their card.
Business credit cards are best for small businesses owners:
- Who want to keep their personal and business expenses separate
- With several employees who need access to company funds
- Who are interested in earning rewards on their spending
- Who are willing to give a personal guarantee
The most rewarding business credit cards offer rewards and benefits to their cardholders, much like personal credit cards. However, business credit card rewards tend to be more lucrative and credit limits are typically higher than personal credit cards because businesses generally spend more. Many business credit cards offer valuable business perks like free employee cards, for which you can set spending limits and earn rewards on card spending. You may also receive access to helpful accounting tools and resources that will help you stay on top of your financials.
While corporate credit cards have strict eligibility rules, business credit cards are available for any type of business, including:
- Small business owners
- Sole proprietors
In order to be approved for a business credit card, you'll typically have to undergo a credit check and proof of business ownership.
What are the best business credit cards?
There are numerous business credit cards available for small business owners. The best small business cards will provide strong rewards and business perks that can be valuable for your company.
Best for rewards: Ink Business Preferred® Credit Card
The Ink Business Preferred® Credit Card is excellent for businesses who value earning rewards on their spending, and who can appreciate a generous sign-up bonus: Earn 100,000 bonus points after you spend $15,000 on purchases in the first 3 months from account opening. Cardholders can also Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn.
You also have a variety of flexible redemption options, including transferring your points to a Chase travel partner to increase their value through Chase Ultimate Rewards®.
- Annual fee: $95 annual fee
- Sign-up bonus: Earn 100,000 bonus points after you spend $15,000 on purchases in the first 3 months from account opening.
- Earning rate: Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn.
- Other benefits: Flexible redemption through Chase Ultimate Rewards®, free employee cards, $0 foreign transaction fees, travel and purchase protections
Best for 0% intro APR: American Express Blue Business Cash™ Card
The American Express Blue Business Cash™ Card has a lot to offer small business owners, including a nice 0% interest offer: Intro APR of 0% on purchases for 12 months from date of account opening. After that, the APR is 18.24% - 26.24% Variable. You'll also earn a Earn a $250 statement credit after you make $3,000 in purchases on your Card in your first 3 months. (redeemable for statement credits). Plus, Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1% (redeemable for statement credits), all for No annual fee.
The cash back earned with this card is automatically credited to your account statement, making redeeming your rewards easier than ever.
- Annual fee: No annual fee
- Welcome offer: Earn a Earn a $250 statement credit after you make $3,000 in purchases on your Card in your first 3 months. (redeemable for statement credits)
- Earning rate: Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1% (redeemable for statement credits)
- Intro APR: Intro APR of 0% on purchases for 12 months from date of account opening. After that, the APR is 18.24% - 26.24% Variable.
- Cash back automatically credited to your account statement
- Terms apply
Best for hotel points: The Hilton Honors American Express Business Card
For small business owners who travel frequently for work, The Hilton Honors American Express Business Card can be extremely lucrative. With a moderate annual fee of $95, cardholders will receive complimentary Hilton Honors Gold status with the opportunity to earn Diamond status when they spend $40,000 on eligible purchases in a calendar year (enrollment required).
You'll also get a suite of purchase and travel protections, free employee cards, free weekend night rewards with Hilton, a Priority Pass™ Select membership (enrollment required) and more.
- Annual fee: $95
- Welcome offer: Earn 150,000 Hilton Honors Bonus Points plus a Free Night Reward after you spend $4,000 in purchases on the Hilton Honors Business Card within the first three months of Card Membership. Offer ends 7/19/23.
- Earning rate: Earn 12X at hotels and resorts in the Hilton portfolio, 6X on Select Business & Travel Purchases, 3X Everywhere Else. Terms & Limitations Apply.
- Elite status: Complimentary Hilton Honors Gold status with the opportunity to earn Diamond status (enrollment required)
- Other benefits: Free weekend night rewards, Priority Pass™ Select membership (enrollment required), free employee cards, None foreign transaction fees
- Terms apply
Do business credit cards affect personal credit?
Whether or not your business credit card will affect your personal credit will depend on if your specific card reports to consumer credit bureaus. If it does not report to consumer credit bureaus, your business credit card activity should not affect your personal credit score. However, if it does report to consumer credit bureaus then it may affect your personal credit score.
Does having a corporate credit card help your credit?
Having a corporate credit card should not affect your personal credit, as corporate credit cards don't require a personal guarantee. However, a corporate credit card can impact your business credit score. With responsible use, it can improve your business credit score and with misuse, it can harm your business credit score.
The information related to Ink Business Preferred® Credit Card, American Express Blue Business Cash™ Card and The Hilton Honors American Express Business Card has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.
These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
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How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.
Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).