The Benefits of Business, Corporate, and Purchasing Credit Cards

By: Jonathan Wagner

In recent years, plastic has gradually replaced paper money as the preferred method of payment. As consumers, we’ve been using credit cards for decades, but they were once reserved primarily for luxuries and large expenditures.

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There’s a good chance your wallet may be void of cash at this moment, and perhaps your checkbook is a little dusty as well. Credit cards are also fast becoming the preferred channel of payment for businesses. Credit cards allow purchases to be easily monitored, and they reduce administrative tasks while saving time and money. So, it’s obvious that credit cards are a must for businesses wishing to make purchases in a 21st century economy. The question is not “Could my business utilize credit cards?” but rather “Which type of business credit card is right for my business?”

The three most common types of cards used by businesses are corporate cards, business cards, and purchasing cards. Corporate or business cards are similar to traditional consumer credit cards in the respect that they may be used for a variety of purchases and may even accrue rewards. Purchasing cards, commonly referred to as “P-cards,” are specialized cards used to make business-to-business purchases.

Business Credit Cards

Business cards are primarily used by small to midsize businesses while corporate cards are used by larger corporations. A business card is opened in your name as the business owner, and approval is subject to your personal creditworthiness. In order to allow employees to make purchases, you will need to add employees as authorized signers. This gives the employees the authority to sign for purchases, but it does not hold them personally responsible for purchases.

A key perk to using a business card involves the accrual of rewards similar to those you would find with a consumer card. An example of a business card with rewards is the Capital One Spark Business VISA, which allows you to earn 2% cash back on purchases.

Using a Corporate Credit Card to Benefit a Business

Corporate Credit Cards

Corporate cards are used by larger businesses and corporations, and they’re opened in the name of the business rather than the owner. The business owner’s personal information and creditworthiness are not even factored into the approval process. The corporation can issue additional cards to employees, and the business takes responsibility for purchases made on each employee’s card. The issued cards will actually list the employee’s name on the card. Corporate cards are frequently used by traveling employees at hotels, airlines, restaurants, and entertainment venues. An example of a corporate card is the Citi® Corporate Card.

Purchasing Cards

Purchasing cards are known as “P-cards” and are used to make business-to-business purchases. These purchases may include supplies, vendors, legal services, or construction costs. The aim of the purchasing card is to make your life simpler as a business owner. The purchasing card eliminates the many frivolous steps involved in the purchasing process. These steps include invoice creation, mailing, processing, payment deposits, and collection activities. By switching from a traditional invoice system to a purchasing card, you can save around 55% to upwards of 80% over the traditional process cost. An example of a purchasing card is the American Express Corporate Purchasing Card.

So, whatever your business needs may be, you would benefit immensely from some of the credit card options laid out in this article. From corporate travel to paying for supplies to everyday purchases, finding the right credit card solution is vital to the efficiency of your business. Lowering administrative costs is at the heart of increasing your profit. This may mean reducing your administrative staff or reducing fees to your accountant. If you’re a small business owner, this could mean freeing yourself up to grow your business instead of being bogged down with frivolous administrative tasks.

An efficiently run business is clear evidence of a successful business. If you need a loan or a line of credit for your own business, learn about some of the best options out there.


Jonathan Wagner

About Jonathan Wagner

For nearly ten years, Jonathan has worked in the exciting field of financial services. He currently oversees the pricing of the merchant services portfolio for a mid-size bank. His passion is to help both individuals and businesses make informed decisions with confidence. At the end of the day, money’s not everything but almost everything costs money.


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