Corporate Credit Cards: Curse or Blessing for Businesses?
Corporate credit cards are becoming increasingly popular in Germany. While large companies already bill business trips to a large extent by company card, it still looks quite different among medium-sized companies. It is emphasized time and again that corporate credit cards have many advantages and thus also use medium-sized companies and self-employed.
But is that true? What are the benefits and how are problem areas such as data security and data misuse handled? The following article should bring light into the darkness.
1. For which companies is a company credit card worthwhile?
Who asks this question must distinguish between different types of corporate credit cards. While so-called business credit cards are especially interesting for small businesses and the self-employed, the offers for corporate cards are mainly aimed at large companies with many employees.
Table: Differences between a Corporate Card and a Business Card
Advantages of the Corporate Card
The biggest advantage of a corporate credit card in both models is the exact documentation of all sales. Billing is greatly simplified, which not only saves time, but also reduces the cost of accounting. In addition, there are a whole range of other advantages that mainly concern corporate cards:
- When using the charge cards, an interest-free pre-financing of all sales is made.
- The conditions and additional services can be negotiated very advantageous especially by large companies.
- Employees are always equipped with the necessary liquidity for emergencies and special situations in field work.
- Based on the data provided, analyzes can be carried out to reduce costs in the future.
- Travel bookings are a breeze with a Corporate Card, and spontaneous quick bookings can often be carried out without any problems.
Note: Know the condition and negotiate
Of course, entrepreneurs should study the terms carefully before signing a credit card contract and quietly seek multiple offers from various banks and credit card issuers. Since the conditions can be quite negotiated, it is advisable to take advantage of the strong position and to obtain even better modalities for the own company.
2. How is the disposition determined and the use of credit cards regulated?
The big advantage of a corporate card is that many individual credit cards are settled by employees through a single account. What seems very simple at first sight, however, presents dangers for companies.
Can employees charge the credit card indefinitely and are actually billed only for business costs?
Normally, such concerns are unfounded, as many banks provide the company with appropriate regulatory functions :
- Card limits can be set individually at the banks for each credit card.
- Transfers from a company credit card to an account are often not possible to prevent abuse.
- Cash withdrawal limits per day also ensure that abuse can not cause much damage.
- Another type of limitation results from charging with a credit that the employee can dispose of.
- A detailed breakdown of expenses also shows whether an employee may have made private expenses through a company credit card. These can then be charged to him privately.
How to prevent the misuse of credit cards
Another possibility is the use of the private account of employees. In such cases, the interest-free period is used to transfer the accrued balance from the company account to the employee, so that this in turn can balance the balance at the card provider. Basically, there are many ways to control the disposal and avoid abuse.
EXTRA: Does using a credit card lead to debt?
How are corporate credit cards secured today?
Even though credit card misuse in Germany has dropped significantly in recent years, according to statistics from the Federal Criminal Police Office, almost 2,000 cases recorded by the police are still reason enough not to take the issue of security measures lightly.
Infographic: abuse cases of check and credit cards in Germany
But what about corporate credit cards? These are now in addition to an EMC chip as a mandatory measure nor a magnetic strip. This is due to the fact that not all countries have implemented a complete conversion. However, as a corporate card is very important, especially on business trips, the most versatile route was chosen here.
Table: Security measures of many providers
Conclusion: That’s why the company credit card is worthwhile
Company credit cards are an interesting alternative for many companies when it comes to billing travel expenses for employees. Their use eliminates the costly cash advances and the individual bill, which not only cost a lot of time, but also significantly burden the budget. While small companies with few employees often already get along well with a business card, corporate cards are an interesting solution for large companies.
This also allows many cards to bill through an account easily, and the providers also provide extensive billing and evaluation of each individual card. If companies sensibly regulate the disposal by the employee and make sure to choose appropriate secure card models, a corporate card can (almost) always be advantageous.