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Corporate credit cards describe a type of card designed to meet the needs of large businesses. By large businesses, we’re referring to companies with hundreds of thousands of dollars or more in annual revenue, well-established credit and hundreds of employees.

Corporate cards enable these businesses to separate business expenses from personal expenses, track and manage employee spending, improve cash flow and earn rewards for spending. However, it often comes with hefty fees and strict eligibility requirements.

This guide to corporate cards will help you understand what they are and how they work.

Know the basics of corporate credit cards

Corporate credit cards make it easier for companies with multiple employees to track and manage their expenses. When you open a corporate credit card account, you’ll be able to issue credit cards to your employees, which they can use to pay for expenses like flights, supplies and hotels.

Most corporate cards also allow you to set spending limits for each employee, and they come with accounting tools to make it easier to track your company’s expenditures. You may even be able to earn rewards like airline miles or cash back on purchases, which you can pass onto your employees or put toward future business expenses.

Unlike small business credit cards, which almost anyone who sells products or services can get, corporate cards are reserved for registered corporations with good credit. Additionally, some card issuers require businesses to have a certain amount of annual revenue to be approved. For example, you can’t get an Amex corporate credit card if your business has less than four million dollars in revenue.

Understand your business’s spending habits

Before you apply for a corporate credit card, it’s important to analyze your company’s spending habits. Some corporate cards have monthly spending requirements you’ll need to meet. Figuring out how much you plan to spend each month will help you narrow down the right card for your business.

Many corporate credit cards also offer rewards on purchases. Some cards will give you flat-rate cash back on everything your company buys, while others will reward you for spending in certain categories like dining out. Dig into your financial records to figure out which categories your company spends the most on.

If your biggest expense is travel, for example, you may want to go with a credit card offering a high reward rate on hotel rooms and airline tickets. If you don’t notice any spending patterns, however, you should look into flat-rate cash back cards rewarding you for all of your purchases.

Another factor you may want to consider when choosing a corporate credit card is the welcome bonus. Some cards offer bonus miles or extra cash back when you spend a certain amount of money within the first few months. If you want to maximize your rewards, choose a card with a welcome bonus you think you’ll be able to earn.

Weigh the pros and cons of corporate card fees

Many business credit cards allow you to add employee cards at no extra cost. But if you have a corporate credit card, you’ll likely have to pay a fee for every employee card you open. Amex, for example, charges a set-up fee whenever you add a new credit card to your account. While this is a small fee, it adds up, especially if you have a dozen or more employees. You may even have to pay a yearly maintenance fee for each employee’s credit card, which can get expensive.

In addition to fees for employee cards, most corporate cards have annual fees, foreign transaction fees and late fees if you miss a payment. You’ll also have to pay interest if you carry a balance from month-to-month.

Corporate credit cards also tend to offer lower rewards rates than business cards, which makes it harder to recoup the cost of any fees. For every dollar you spend on an Amex corporate credit card, for example, you may only get one point. But with business credit cards like The Blue Business® Plus Credit Card from American Express (a NextAdvisor advertiser), you’ll earn 2X points on the first $50,000 in purchases per year, then 1X points.

Although corporate cards are the more expensive option, there is one big reason you may want to go with them — the lack of personal liability. Unlike business credit cards, corporate cards don’t usually require you to sign a personal guarantee, so you won’t be on the hook for your company’s debts.

Consider any corporate bonus benefits

Many corporate cards come with extra benefits to sweeten the deal, like a dedicated account manager, travel perks and accounting tools. If you ever have a problem with your card, you’ll likely be able to talk to the customer service rep who’s assigned to your account. You’ll never have to waste hours on the phone resolving issues again, which will allow you to devote more time to essential business tasks.

Your card may also give you access to airport lounges, emergency travel assistance services, discounts on flights or cash rebates on airline tickets. You may even get travel insurance to protect you if you lose your baggage or need to cancel your business trip.

If you don’t travel for business often, you may prefer a corporate card to help you save on business expenses like software and advertising. Brex offers discounts on Google Ads and software like Zoom and Salesforce, which could save your business hundreds of thousands of dollars.

Many corporate cards also offer accounting tools to help you stay on top of business expenses. For example, Amex corporate cards come with a management tool that allows you to track employee credit card activity, identify high-risk transactions, cancel accounts and make payments in one place.

Corporate credit cards can help business owners with large companies separate their personal finances from their business and manage employee spending. They also allow companies to earn rewards on purchases and come with perks like travel insurance, software discounts and more. But in order to qualify for many corporate cards, your business will need to hit certain annual revenue and monthly spending requirements. You may also have to pay a maintenance fee on each employee credit card you open, which could cut into your profits.

However, business cards can offer companies the benefits of corporate cards with lower costs, fewer eligibility requirements and more perks. So be sure to shop around before deciding on a card for your company to ensure you are getting the best value.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.