Corporate Credit Cards: How They Work, and How They’re Different from Business Cards
While small business credit cards typically require a personal guarantee, corporate credit cards do not. However, corporate credit cards are intended for large businesses and usually require your business to have an annual revenue of over $4 million.
Corporate cards are less risky for individual cardholders, since responsibility for debt is tied to the company rather than to employees or shareholders.
That said, you should only consider a corporate credit card if you own or represent a major corporation that can easily meet the eligibility requirements for a corporate card. All other business owners should opt for a business credit card.
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 is a corporate credit card?
Corporate credit cards are designed for established companies with a minimum of $4 million in annual revenue.
How do corporate credit cards work?
Corporate credit cards work as a large-scale payment solution, giving companies fine-grain controls and expense management tools for a large number of employee cards. Corporate cards require an established business credit history rather than a personal guarantee. If the company goes under, the business is typically responsible for any debt accrued.
| Pros | Cons |
|---|---|
No personal guarantee required Earn rewards on spending Can issue company cards to many employees and set spending limits Access to advanced accounting tools to keep track of spending Easier for employers and employees to manage company spending | Stringent eligibility requirements Only available for large corporations Positive business credit history required for approval May perform a hard credit pull on individual employees to make them authorized users |
Strict eligibility requirements
While freelancers and start-ups can apply for a small business card, corporate credit cards have much more stringent eligibility requirements.
Corporate credit cards are best for corporations
- With an annual revenue of at least $4 million
- With many employees who need access to company funds
- Who meet the issuer’s strict eligibility requirements
For example, corporate credit cards can only be acquired by S-Corporations, C-Corporations and LLCs with an established business credit score. The company will also typically need to meet the card issuer’s threshold for the minimum number of employees and annual revenue.
Analytics tools
When you start to issue corporate cards to dozens (or even hundreds) of employees, tracking and managing employee spending can become difficult. That’s why corporate credit cards are equipped with analytics tools. These tools help your company grow and scale, making sure you don’t lose control of expenditures along the way.
The best corporate credit cards come with powerful analytics tools that allow company accountants and managers to track spending across departments, vendors and even individual employees. These tools also streamline the process of reconciliation and reimbursement.
Rewards geared toward large corporations
Much like business credit cards, corporate credit cards often earn rebates and rewards on spending in the form of cash back, points or miles. Cards also frequently come with perks like airport lounge access, Global Entry and TSA PreCheck credits.
These rewards are often credited back to the main company account, though some corporations allow employees to keep the points they earn from corporate card spending. 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?
The responsible use of corporate credit cards will positively affect the business’s credit score. This means paying the total 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.
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 will have a small, temporary impact on your FICO score. 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 your company card and never use a corporate credit card for personal expenses to avoid running into trouble.
What is a business credit card?
Business credit cards allow small business owners and their authorized users to charge all their business expenses to a business account.
How do business credit cards work?
The primary difference between business credit cards and corporate credit cards is that business credit cards typically require a personal guarantee making the business owner personally responsible for all expenses charged to their card.
| Pros | Cons |
|---|---|
Easily track and limit employee spending Earn rewards on common business purchases Higher credit limits than personal credit cards Separate business and personal expenses Responsible use improves business credit score Access to account management tools | Usually requires a personal guarantee High interest rates and late fees Misuse can negatively impact your business credit |
The best 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. Many business credit cards offer valuable business perks like free employee cards, for which you can set spending limits and earn rewards.
You may also receive access to helpful accounting tools and resources that will help you stay on top of your finances. While corporate credit cards have strict eligibility rules, business credit cards are available to any type of business, including:
- Freelancers
- Small business owners
- Sole proprietors
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 make a personal guarantee for business spending
To be approved for a business credit card, you’ll typically have to undergo a credit check and provide proof of business ownership.
What are the best business credit cards?
The best small business cards provide valuable rewards and business perks that help you boost your bottom line.
Best for rewards: The Business Platinum Card® from American Express
The Business Platinum Card® from American Express offers extensive travel perks and business credits (enrollment required) that more than make up for its high annual fee. But its rewards rate is what makes it stand head and shoulders above the competition: You’ll earn 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com, and 1X points for each dollar you spend on eligible purchases. Earn 1.5X points (that’s an extra half point per dollar) on each eligible purchase at US construction material, hardware suppliers, electronic goods retailers, and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year.
- Annual fee: $695
- Welcome offer: Earn 150,000 Membership Rewards® points after you spend $20,000 in eligible purchases on the Card within the first 3 months of Card Membership.
- Earning rate: 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com, and 1X points for each dollar you spend on eligible purchases. Earn 1.5X points (that’s an extra half point per dollar) on each eligible purchase at US construction material, hardware suppliers, electronic goods retailers, and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year.
- Other benefits: Perks like airline fee credits*, business credits* and complimentary access to 1,400+ airport lounges.
*Enrollment required.
Best for 0% intro APR: Ink Business Unlimited® Credit Card
The Ink Business Unlimited® Credit Card can help you save hundreds or thousands of dollars in interest payments on start-up costs or a large business purchase. You’ll pay a 0% Intro APR on Purchases for 12 months. After that, the APR is 18.49% - 24.49% variable. Plus, the card offers a valuable sign-up bonus and lets you earn unlimited 1.5% cash back on every purchase made for your business.
- Annual fee: $0
- Sign-up bonus: Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening.
- Earning rate: Earn unlimited 1.5% cash back on every purchase made for your business.
- Intro APR: 0% Intro APR on Purchases for 12 months. After that, the APR is 18.49% - 24.49% variable.
- Other benefits: Redeem rewards for cash back, gift cards, travel and more through Chase Ultimate Rewards®.
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. For a $195 annual fee, 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, complimentary National Car Rental® Emerald Club Executive® status (enrollment required) and more.
-
- Annual fee: $195
- Welcome offer: Earn 175,000 Hilton Honors Bonus Points after you spend $8,000 in purchases on the Hilton Honors Business Card within the first six months of Card Membership. Offer Ends 6/5.
- Earning rate: Earn 12X Hilton Honors Bonus Points on eligible Hilton purchases. Earn 5X Hilton Honors Bonus Points on other purchases made using the Hilton Honors Business Card on the first $100,000 in purchases each calendar year, 3X points thereafter. 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 and no foreign transaction fees.
Frequently asked questions
Business credit cards often require a personal guarantee, which means the issuer could report late payments and other negative activity on your account to your personal credit report. Some — though not all — issuers will even report your payment history to your personal credit report.
When lenders are deciding whether to issue a credit card or loan to your business, they use your business credit score to determine how risky it will be to lend to your business. If your business or corporation has a history of making regular, on-time payments, your business credit score will be strong, and you will typically get lower rates and better terms. But if you’re establishing a new business, lenders will typically look at your personal credit score to determine how creditworthy you are.
Having a corporate credit card doesn’t affect your personal credit because corporations rather than individual business owners are liable for corporate accounts. However, a corporate credit card can impact your business credit. With responsible use — like making regular, on-time payments with your corporate card — you can improve your business credit score.