How Do Corporate Credit Cards Work?Employees of well-established organisations are given corporate credit cards, which they may use to charge their allowed work expenses—like hotel stays and airfare—without using their cards or cash. These cards, usually called business credit cards, can help employees (and employers) manage to spend, and many of them come with benefits like frequent flyer miles and access to airport lounges.
Corporate Credit Card TypesThe owner of the corporate credit card will either be the employer or the employee, depending on the type. With an individual liability card, the employee is in control of completing an expense report, collecting reimbursement from the employer, and paying the credit card company directly for any charges. Before issuing a card, the credit card company runs a "soft pull" on the applicant's credit, which has no impact on their credit score.
Suppose the card is a corporate liability card. In that case, the employer is responsible for paying any permitted charges (although the employee may be on the hook to pay the issuer directly for unauthorised or personal expenses). The credit card issuer won't usually check the employee's credit because the company is responsible for paying the bill. The employee will likely be accountable for filing regular spending reports so the business can reconcile the card statements each month.
Find out who is accountable for paying the bill each month before an employee uses a company credit card. If they are trustworthy, they should establish a method to guarantee payments are made on time and that they have the money available to pay the remaining sum.