Corporate Credit Cards: Types, Benefits, Eligibility and More

Corporate credit cards in India can be classified on the basis of where the liability lies, as shown below:

1. Corporate Credit Card with Corporate Liability

Here, the card is issued in the name of the company and the company is solely responsible for paying the credit card bills. This is suitable for large businesses with multiple employees who would use the card for several travel and organizational spends. The expenses are directly billed to the company and there is complete transparency and control over the spending.

2. Corporate Credit Card with Individual Liability

Under this arrangement, the liability of paying card bills is upon the employee and they can later get this expense reimbursed from their organization. This is useful for businesses where the business expenses are relatively low.

3. Corporate Credit Card with Joint Liability

Here, both the company and the employee share the liability of card bill payment. This arrangement allows greater flexibility – both for the employer and employee – and is good for businesses that want greater control while sharing accountability.

4. Purchase Cards

Purchase or procurement credit cards are specifically designed for vendor payments. They are helpful in simplifying the purchasing processes by reducing paperwork and reimbursement requests, and are great for companies that frequently spend on products and services from other companies.

Corporate credit cards work just like individual credit cards but the liability for bill payment may differ, as discussed above.

When a company applies for a corporate credit card, this is what happens:

1. The card is issued in the name of the company and linked to the company’s credit profile.
2. Card is assigned to employee/s who frequently incur business expenses
3. Employees make business purchases such as travel, fuel, subscriptions, dining, etc.
4. Expenses are tracked and the company can monitor transactions through online dashboards
5. Depending on the type of corporate card, either the company or the employee pays the bill

Many corporate cards also allow businesses to set spending limits, restrict merchant categories, and generate detailed expense reports.

Following are some of the benefits of corporate credit cards:

• Better Expense Management: Corporate cards simplify business expense tracking by consolidating all transactions into a single account.
• Improved Cash Flow: Businesses get an interest-free period of up to 50 days, allowing them to manage working capital more effectively.
• Higher Spending Limits: Corporate credit cards generally offer higher credit limits compared to personal credit cards, enabling businesses to manage large expenses efficiently.
• Employee Convenience: Employees no longer need to use personal funds for business expenses and wait for reimbursements.
• Reward Points and Business Perks: Many corporate cards offer benefits like accelerated rewards on business spending, airport lounge access, travel and hotel benefits, discounts on business services, etc.
• Enhanced Expense Controls: Companies have better control on their everyday expenses using corporate cards. They can set spending limits for employees, restrict spending categories, monitor transactions in real time and receive alerts for unusual activity.
• Simplified Accounting and Tax Management: Corporate cards generate detailed statements that help businesses reconcile expenses quickly, maintain records for tax purposes and reduce manual bookkeeping errors.
• Better Financial Visibility: Businesses can gain valuable insights into spending patterns, helping them optimize budgets and identify unnecessary expenses.

The eligibility criteria for corporate credit cards may vary across issuers, but businesses generally need to meet the following requirements:

• Registered company or business entity
• Minimum annual turnover requirements (as specified by the issuer)
• Good business credit profile
• Financial statements and business proof
• KYC documents of authorized signatories

At the time of application, the following documents are required:

• Certificate of Incorporation
• PAN card of the company
• GST registration certificate
• Address proof of the business
• Financial statements and bank statements
• Identity proof of directors or authorized signatories