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Corporate credit cards explained: how they help businesses manage spending

From tracking expenses to offering rewards, these cards are designed to make company finances easier to handle.

October 19, 2025 / 09:01 IST
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If you’ve worked in a medium or large organisation, you’ve probably seen colleagues swipe “corporate cards” for travel or client dinners. But what exactly are these cards, and how do they differ from your regular personal credit card? For businesses, corporate cards are more than just a payment tool — they’re a way to control costs, streamline reimbursements, and even earn benefits on company spending.

How a corporate card works

A corporate credit card is issued to employees, but the liability usually rests with the company. That means when you use the card for official expenses — travel tickets, hotel stays, office supplies — the bill goes directly to the company account. The business then pays the credit card provider in full, often after reviewing and approving expenses. This setup removes the need for employees to spend their own money and wait for reimbursement.

Why companies use them

For businesses, corporate cards bring control and visibility. Every swipe is recorded, which makes it easy to track who spent what and where. Finance teams can quickly identify unusual spending patterns, cut down on unnecessary expenses, and simplify audits. Many cards also integrate with expense management software, reducing the headache of paperwork. On top of that, companies earn rewards points, discounts, or travel perks on the collective spend.

Benefits for employees

For staff, the main advantage is convenience. Instead of using personal cards or cash and then filing long reimbursement claims, they can pay directly with the company’s card. It also reduces the financial strain of fronting large expenses, especially for frequent travellers or those handling client entertainment.

Points to keep in mind

Not all companies issue corporate cards to everyone. They are usually given to senior staff or employees who travel or incur regular business expenses. Misuse — like swiping for personal purchases — can have serious consequences, since the spending trail is easy to audit. And unlike personal cards, employees usually don’t build their individual credit history by using corporate cards, since liability sits with the company.

FAQs

Q1. Who pays the bill on a corporate credit card?

The company is responsible for paying the bill, not the employee, though employees are expected to justify and document their spends.

Q2. Do employees earn reward points personally?

No, most rewards are credited to the company’s central account, though some firms may share travel benefits with staff.

Q3. Can corporate cards affect my personal credit score?

Generally, no. Since the company is liable, your individual credit score remains unaffected unless you misuse the card and the company holds you accountable.

Moneycontrol PF Team
first published: Oct 19, 2025 09:00 am

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