Corporate Credit Card: Why Every Business Should Get One

Lately, corporate credit cards have been all the rage. They have seen a surge in demand because of the evolving needs of Indian businesses.

India is one of the prime ecosystems for entrepreneurs, with over fifty thousand ventures disrupting traditional businesses. Corporate credit cards aim to solve the hassles of digital spending for businesses. They act as a financial tool designed to offer working capital, streamline expense reporting, and protect the personal credit scores of business owners.

So, if you don’t have a corporate credit card for your business yet, we’re going to tell you why it’s a good idea to get one. Read on.

What is a corporate credit card? 

It is a type of credit card issued by a bank to a business. The business owner can choose to extend the card to their employees as well to help create a seamless reimbursement experience. This way, they don’t have to use their personal funds to pay for business-related expenditures and then, go through with the reimbursement process. 

Corporate cards increase the company’s purchase power while improving the cash conversion cycle with short-term credit at no cost (zero interest). 

Some expenses such as SaaS subscriptions, cloud services, and marketing expenses can only be done with a credit card. With corporate credit cards, you also get a higher credit limit than personal cards to be able to make all business expenses without affecting personal liability.

Apart from helping manage finances, corporate credit cards make compliance and reporting much easier for a growing business that needs to focus on the core business. They also have various perks to offer in terms of rewards and lower charges for international transactions.

How does a corporate credit card work?

A corporate credit card works pretty much like any other credit card. It can be used to make online payments as well as purchases at a PoS in brick-and-mortar stores. These payments get registered to the company’s statements, while the owner’s or employee’s personal funds don’t get tangled up in the process. 

Here is how a corporate card actually works-

1. Corporate Liability

With standard business credit cards, the business owner is often the one who is liable. This means if the business fails, the owner is personally responsible for the debt. With a corporate credit card, the company is solely responsible for the debt. This protects the founder’s personal assets.

2. Expense Management

Corporate cards are usually tethered to a central dashboard. When an employee swipes a corporate card, the transaction is instantly recorded in the bank’s finance dashboard. This eliminates the need for manual expense reports and allows finance teams to track spend in real-time.

The card typically has the name of the company as well as the cardholder’s name. You can get a corporate credit card for yourself or for employees from

1. A card issuing company
2. Partnering with a bank or a financial services provider

Corporate credit card vs personal credit card

A corporate credit card has a lot of advantages over a personal one for your business expenses. Here’s how. 

No personal liability 

Every business owner understands that business transactions can get tricky, mainly due to the high transaction value involved. Later, when such a situation arises – using your personal credit card risks your personal credit limit. However, a corporate credit card has no liabilities on the individual.

Expense management

As a business, you have complete control and visibility over spends. You can set an upper limit on funds that can be used by your employee. This helps you manage your expenses really well. And, you don’t have to worry about making reimbursements to your employee later on. 

Higher spending limit

Corporate credit cards have a much higher limit on the funds you can access when compared to personal cards or business credit cards. They tend to have dynamic credit limits, depending on your business’ growth. This is a great benefit because as your requirements grow, your credit limit becomes higher. 

No reporting hassles

You can claim all the business expenses paid from a corporate credit card in your profit and loss account. Whereas, personal card users have to audit their statements closely to separate business charges from personal charges. Without much effort, you will be able to claim accurate business expenses and reduce your tax liability. 

Reduced expense fraud

You get greater visibility of expenses made by your employee when they use a corporate credit card. This helps the audit and finance teams to spot fraudulent purchases and non-business expenses better. Any expense or refund will occur on the same card, which means there’s no room for misuse. 

Better credit score

A corporate credit card helps build your company’s credit score. This helps you get cheaper capital in the future. This is an easy and risk-free way to increase your company’s credit score.

Corporate Card vs. Business Card vs. Personal Card

It is common to be confused between personal credit cards, business cards, and corporate credit cards. Here is a brief table explaining the difference.

Benefits of Using a Corporate Credit Card

If you are still wondering why using a corporate card is an optimal choice for your business, here are the key benefits you derive from it. 

• Interest-Free Working Capital – Corporate cards offer a credit period, typically ranging from  45 to 60 days. This acts as a short-term, interest-free loan, allowing you to pay vendors while holding onto your cash for future expenses. This offers liquidity, which is vital for maintaining healthy cash flow.
• Separation of Finances & Tax Compliance – Using a personal card for business can get confusing at the time of filing taxes. A corporate card ensures a clean separation of personal and business finances. Furthermore, using a corporate card makes it significantly easier to reconcile expenses and claim GST Input Tax Credits correctly.
• Employee Autonomy & Control – Instead of lending your own card to employees or asking them to pay and wait for reimbursement, you can issue Add-on Cards. For example, Corporate Cards issued by RazorpayX allow you to issue add-on cards to employees, set specific spending limits for each card, and disable them instantly if needed, allowing greater control over finances.
• Automated Expense Tracking – Chasing receipts at the end of the month can be a humongous task. Modern corporate cards allow you to track your expenses. Some of these can also be integrated with accounting software, so the data is easier to reconcile.
• Business-Centric Rewards – Corporate cards offer rewards that provide high ROI. For example, RazorpayX Corporate Card offers rewards that are relevant for businesses, such as discounts on AWS, Google Cloud, and other B2B tools.

How to Choose a Corporate Card for Your Business?

Selecting the right corporate card is crucial as it can impact how you scale your operations. When evaluating your options, consider these five key factors.

• Liability & Underwriting – Look for cards that offer zero personal liability. Also, for small businesses, it is important to choose providers that assess you based on cash flow, growth potential, funding, and potential business revenue, without requiring a hefty Fixed Deposit (FD).
• Credit Limit Flexibility – Choose a provider that offers dynamic limits. Unlike traditional banks with fixed caps, modern cards allow you to scale your limit based on your real-time cash flow and revenue.
• Integration & Automation – Ensure the card integrates directly with your accounting software. This automates expense tracking and reconciliation, saving your finance team hours of manual work.
• Business-Centric Rewards – Look for cards that offer relevant perks, such as low forex markups, discounts on SaaS subscriptions (AWS, Google Ads, Slack), and savings on business travel.
• Security – Choose a card that offers real-time fraud detection and the ability to instantly freeze or cancel cards online. This is essential for protecting company funds if a card is lost or a vendor is compromised.

Corporate Credit Card by RazorpayX – The Right Choice

RazorpayX offers corporate cards in partnership with leading banks like RBL Bank and Yes Bank. It is a commercial credit card designed for startups and SMEs to manage business expenses. It offers features like high credit limits, zero personal liability for founders, and a seamless experience that supports your business’s needs without needing extensive paperwork.

Why Choose RazorpayX Corporate Cards –

• No Collateral Required – For eligible startups, the card offers limits based on your business performance and funding, not your personal assets.
• Universal Acceptance – Whether it’s the RBL Bank RazorpayX Card or the YES BANK RazorpayX Card, you get global acceptance for all online and offline merchants. Also, we offer low forex markups at just 2.5% on international transactions.
• Add-On Cards – Issue physical add-on cards to your team members. You maintain full control by setting individual credit limits for every add-on card via the dashboard.
• Real-Time Visibility – View all transactions on the respective bank’s Dashboard as they happen. No more waiting for end-of-month bank statements to know where your money went.
• Savings & Rewards – Get access to curated deals on tools startups use, such as hosting, marketing tools, and CRM software. You can get up to 30% off on 500+ top business tools like AWS, Google Cloud, and Microsoft via our Savings Negotiator!