Things to consider before switching to a corporate credit card

Aug 9, 2021

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Editor’s note: This is a recurring post, regularly updated with new information.

Small business credit cards can help you carefully manage your company’s expenses while earning valuable cash back or travel rewards. At some point, as your profits and employee headcount increase, you may start to outgrow the cards you originally started with. Today, we’re going to take a look at things to consider when you are thinking of switching to a corporate credit card.

Are you a small-business owner? Sign up for our daily newsletter and join our small-business community.

In This Post

Be prepared to share financial data

Not all business owners can qualify for a corporate credit card. Issuers may set minimum revenue benchmarks and require that you have an established business credit score, among other specific criteria. You’ll likely have to meet minimum spending or earning requirements that you can prove. The One Card from Capital One is designed for businesses with a minimum of $20 million in revenue, for example, while American Express requires your company to have grossed more than $4 million in the previous fiscal year — and you can’t be classified as a sole proprietorship is designed for businesses with a minimum of $20 million in revenue, for example, while American Express requires your company to have grossed more than $4 million in the previous fiscal year — and you can’t be classified as a sole proprietorship.

The information for the One Card from Capital One has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Of course, you’ll have to prove to the issuer that your company meets any required criteria, as well as providing supporting documentation. Amex says to expect to be asked to hand over the following, for instance:

  • Recent audited financial statements
  • Details on your company’s structure and organization
  • Tax information, including a federal tax ID
  • Contact information for your company’s authorizing officer

If you’re looking to take the next step in your company’s credit needs but don’t quite meet the thresholds established by the major issuers, you could also look into applying for the Brex Corporate Card. This is designed to be a corporate card for startups, but the company uses innovative technology to improve its underwriting standards and make the card more accessible to companies that are still in the growth stage.

The information for the Brex Corporate Card from Capital One has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Alternatively, you can open the Divvy Business Credit Card which offers unlimited no-annual-fee business cards with decent reward bonus categories. Even if you have poor credit, you might be able to take advantage of the Divvy corporate experience by using prepaid account. They’re effectively secured credit cards for your business.

Related: Divvy Business Credit Card review

Limiting personal liability

One big reason to switch to a corporate credit card is to free yourself of any personal liability to repay charges. All small business card applications require your personal social security number, and it’s your personal credit report that’s used to approve the application. You will also be held personally responsible for guaranteeing any payments.

A corporate card, on the other hand, can be set up so that your company is responsible for repaying the debt, rather than you personally. Depending on how much your business is charging to its credit cards, this reason alone might push you to switch to corporate card sooner rather than later.

Close-up of a pensive young woman on a coffee break at cafe, enjoying a fresh cup of coffee while using a tablet for an online transaction.
A corporate credit card might make sense if you’re looking to limit your personal liability for company credit card charges. (Photo by gruizza/Getty Images)

Headcount and expense management

Chase says you should start thinking about a corporate account if the number of employee cards you’ve expanded to approaches 100. But if you’re happy with your Ink Business Preferred Credit Card, for example, you don’t necessarily have to switch to a corporate card just because your business is growing.

Related: Small business credit card vs. corporate credit card: Which is right for your business?

You might want to do so, however, because corporate accounts also come with more sophisticated expense management tools than you might otherwise find on small-business card accounts, including software that will allow you to integrate card spending with your general ledger to reduce manual data entry. The Divvy Business Card expense management benefit is a perfect example. And, much like with small business credit cards, you’ll be able to monitor and restrict individual employee spending by category.

Yes, there are still rewards

Corporate cards still offer rewards and travel benefits, but you may find the programs aren’t quite as lucrative as with small business cards. The One Card from Capital One offers tiered rewards: 1.5x on all spending if you choose a 14-day billing cycle or 1.25x points on all spending if you choose a 30-day billing cycle.

That’s a noticeably lower return than you’d get on the Capital One Spark Miles for Business card, but businesses spending hundreds of thousands of dollars each year will still rack up a pretty penny in rewards at those rates.

You may also have a higher annual fee for employee cards when you go corporate than you are charged with small business cards. But the higher cost does come with more flexibility in how rewards are distributed. American Express says you can consolidate earned points from multiple corporate cards for company redemptions, or allow employees to redeem them individually through the Membership Rewards program. Going that route could serve as an employee incentive, and absolve you from having to manage your company’s ever-growing stash of points.

Bottom line

If you’re a business owner and your firm is big enough to qualify for a corporate credit card, it may be worth exploring — if for no other reason than you’ll be able to better protect yourself from liability. That can be a strong incentive on its own. But you may also be looking for a more robust way to track your employees’ spending. When you have dozens or even hundreds of employees, the tools business credit cards offer just may not be appropriate for your needs any more.

Featured photo by Luis Alvarez/Getty Images.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
17.24%-26.24% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.