It’s fantastic for a business owner to witness their company’s impressive yearly revenue growth. That is a dream for every entrepreneur. Once their small business grows year-over-year, they must transform their startup into a profound corporation.
That is the perfect time to transit financial tools for the business. You should replace your business credit card with a smart corporate credit card. Corporate credit cards work for organizations with yearly profits of several million dollars as a handy expense management tool.
It is therefore important that you understand its functions, eligibility requirements, and pros and cons. Let us start!
First off, what is a corporate credit card?
A corporate credit card is issued to big organizations with a yearly revenue of more than five million dollars. The business owner can not use the card for his expenses. As a business entity, his corporation can make corporate business card transactions.
That’s why only corporations with substantial revenue can access this type of card. To be eligible to use a corporate business card, a corporation should possess a clean record of business credit history.
A C-Corp, S-Corp, or LLC corporation with a perfect credit score can have a corporate credit card. These cards give you plenty of financial advantages like flyer miles and cash discounts. The best thing that comes with a corporate credit card is that the workers of an organization can issue their cards to maintain their work-related expenditures.
How does this card work?
It works as a personal credit card. People can utilize their corporate credit cards to make their business-related transactions.
A corporate credit card is used to make corporate purchases. The transaction history and the usage of the card will have a direct impact on your credit score.
It comes with distinguished specialties you can’t get from standard business credit cards that small business owners use. With your corporate credit card, your employees can avail of their credit card, which you don’t need to add to your company’s liabilities.
Your accounting team can access many software and services that assist in keeping the financial balance and credit score in line. Moreover, corporations can have discounts on ordinary expenditures and retailers.
Advantages of using a corporate credit card:
- The ability to use a business line of credit
- Gain benefits from transactions
- Employees are provided with company cards
- You can use premium financial solutions to assist your business with bookkeeping and cost-cutting.
Drawbacks of these credit cards:
- Established businesses with substantial annual sales are eligible to apply for this card.
- The application procedure is lengthy and hectic. It might even demand a financial audit as well.
- To qualify, a corporation must have a perfect credit history.
Successful business owners need clarification about the perfect time to shift to a corporate credit card from their old business cards. So, let us tell you precisely.
If you have a good credit history, a good team of professional employees, and a yearly profit in the millions, then it is the right time to apply for a corporate credit card.