What is a Corporate Business Credit Card?

Tess C. Taylor

In the world of business, a corporate business credit card is an approved line of credit to be used for business purposes. Sometimes referred to as a purchasing card, a corporate business credit card allows company representatives to make purchases of goods and services used for the purposes of conducting business. A corporate credit card is the preferred way for many businesses to control and track expenditures.

Some corporate business credit cards may offer discounts on airfare.
Some corporate business credit cards may offer discounts on airfare.

Typically, the line of credit for a corporate business credit card will be set at a higher limit than that of a regular consumer credit card. The reason is that a business is considered more stable and is backed by the good name of the company. Companies generally have strict accounts payable terms and therefore keep credit accounts paid up to date, so financial institutions are able to offer more generous spending limits.

Business credit cards often feature cash back rewards.
Business credit cards often feature cash back rewards.

A corporate business credit card can be a convenient way for businesses to keep track of costs and cut down on overspending. Corporate credit cards can be issued to individual representatives or departments with set spending limits. Each cardholder is then responsible for staying within these limits and obtaining approval for any purchases that fall outside of the company parameters. If the card privilege is abused, it can be revoked at any time.

Many businesses use corporate business credit cards as a strategic form of financial management by extending the period of time between asset purchases and repayment. If a large capital investment must be made, money can be stretched out over a period of time to make the purchase possible without going into too much debt. In addition, credit card accounts can be obtained that have lower interest rates than traditional corporate loans.

Another advantage of having a business credit card is that there are often discounts and rewards programs attached to corporate accounts. Discounts on travel and entertainment costs are frequently offered to owners of business credit cards. In addition, many of the most popular business credit cards offer rewards such as cash back and rebates for using the credit account for making regular business purchases.

In order to apply for a corporate business credit card, most businesses must be able to provide proof of having a business license or an approved business bank account. In addition, some vendors of business lines of credit may require industry references that are in good standing with other creditors. Once established, a business credit card must be handled with care in order to build a solid credit history which will enable the spending limits to be raised over time for the benefit of future purchases.

A corporate business credit card might be used to pay for hotel stays by business travelers.
A corporate business credit card might be used to pay for hotel stays by business travelers.

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