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5 Things You May Not Know About Company Credit Cards

Company credit cards are a popular expense management tool. It gives employees a quick way to pay for items like travel, office supplies, and accommodation without using their own money. But are company credit cards suitable for your business? Here’s what you need to know before you decide on one.

5 Things You May Not Know About Company Credit Cards

While these credit cards may seem convenient, they’re not without hidden charges and lengthy application processes. They also don’t improve your expense management process in a significant way. 


So let's bring to light some considerations before you jump on a company credit card, and look at an alternative that may be better suited for your business. 


Fees and charges 

Before committing to a company credit card, you should be aware of the many charges that can eventually add up if left ignored. While we may be familiar with annual fees (which can go up to $800) and interest, there are also other corporate credit card fees that are less known, such as: 

  • Late payment fees 
  • Over limit fees 
  • Extra cardholder fees
  • Credit card surcharges 
  • Balance transfer fees   


With rising interest rates and increasing cost of living, credit card debt has been steadily growing. Australia’s national credit card debt reached $17.44 billion in February 2022, which is a sign that going into debt isn’t the best thing for your business right now. 


Application requirements and times

Business credit card applications take quite a bit of paperwork and a while to process. In fact, some companies take months for their credit card to arrive, which is highly inefficient if you’re looking for an immediate solution. 


To apply for a business credit card, you’ll need to provide your company’s financial statements, partnership agreements, company deeds, and other documents that will prove your business’s validity. You could opt for an instant approval credit card, but it’s not guaranteed, and you will need to show good credit scores to get approval.  


Spending rules and card cancellations 

Unfortunately, company credit cards have not caught up with the speed and agility needed by small businesses. When running your day-to-day operations, your expense management needs to be flexible and react quickly to unexpected changes. 


Take a common scenario: if you want to change a limit on a business credit card, you’d most likely have to call the bank and make the changes during office hours only. This same process is applied if you’ve lost your card. Some banks may allow you to lock or cancel it online, but the time it takes to cancel business credit cards depends on the provider, and it might not be immediate. 


Claiming rewards on business credit cards 

A big perk of company credit cards is the rewards and cash back you can get. Generally, most of these cards offer point collection and redemption, discounts on selected retailers, and even travel insurance. However, more rewards typically equal higher fees, so you’re probably paying for it in your interest or annual fees. 


Besides that, you should also consider if these loyalty points cost more than they are worth; ask yourself: 

  • Am I buying items that my business doesn't need to earn points?
  • Are the discounts worth it? Could I get a cheaper/similar option if I looked around?
  • Are there hidden charges that will accumulate when I buy an item for my business?
  • Will my points expire quickly? 
  • Is my data being collected by retailers in any rebates, rewards, or loyalty programs? 


Oftentimes, your rewards and points will not match the amount that your business is paying for them. 


Visibility and paperwork 

A key factor to consider when choosing the right expense management for your business is the amount of paperwork you’ll need to do and the control you’ll get from it. Company credit cards don’t allow you to track your company transactions in real-time, or set and allocate budgets. 


Plus, your staff will still need to compile receipts and submit them to the finance teams, which does not eliminate the issue of missing receipts. So if corporate credit cards aren’t the solution to a clean expense management process, what is? 


Prepaid corporate cards: An alternative 

With prepaid corporate cards, small businesses can get the convenience of a corporate credit card without the hassle of long wait times, lengthy application processes, and hidden charges. 


These preloaded cards and expense management software help small businesses: 

  1. Eliminate all expenses paperwork 
  2. Capture receipts so that they never get lost
  3. Reconcile all transactions with banks
  4. Set and allocate budgets
  5. Easily track where money is being spent 
  6. Synchronise with accounting software 
  7. Eliminate hours of manual tasks and no firefighting involved
  8. Cancel or change your card terms immediately, anytime, anywhere. 


Corporate credit cards aren’t your only option in expense management. To learn more about how Budgetly works, download our eBook, Managing Expenses with Budgetly. Alternatively, schedule a demo with us today to find out how we help businesses make expense management easier.


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