Questions to ask when you get a company credit card

Corporate credit cards provide many benefits when employees are on business travel and some of them include additional benefits, like points rewards. If an employer gives a corporate credit card, the employee must bear in mind a few considerations before he/she starts using it. It’s also important to be aware that it’s company money that’s being spent.

This process sometimes includes a credit score check by the bank, even if you’re not the one paying for it, so there’s a fair share of questions to ask when you get a company credit card… but here are a few important ones:

What constitutes “only for business” when using company plastic? There’s a fine line between using it for what you believe is suitable and what an employer may regard as unsuitable.

It goes without saying that your employer expects for you to use your card for business purposes only. It all comes down to the specific agreement between you and your employer, but the following are a few things that are not usually considered “company expenses”.

  • Car refuel charges: Most companies won’t reimburse tank refilling fees on hire cars.
  • In-room pay per view movies and large meal bills: Unless it has a purpose, like entertaining potential big clients.
  • Tipping
  • Cash withdrawals
  • Any car, hotel room, plane seat upgrade.

A good option here is finding if there’s a free service that comes with the card, like road assistance or travel insurance.

Who will pay the monthly charges?

Almost all company credit cards have the employer as the one in charge of taking care of monthly bills, so corporate liability is the preferred way for most companies. Some companies work a little different, the employee will be responsible for the monthly bill. Then he/she will make an expense report so the company reimburses the money.

Some other companies choose shared liability. This means that both employer and employee are responsible for the credit card. It is only a matter of who has to meet the obligation first. Evidently, if the company doesn’t pay, the lender will contact the employee.

Can banks look at my personal credit history?

It depends on the card issuer, but they will likely look at your personal credit records before and after they issue credit, it’s a normal practice for many lenders. This means that it will be constant monitoring to your personal credit history.

It gets more complex if you have an agreement with your employer in which you pay the bill and then they reimburse you. If that’s the case then it is certain that the creditor will have a look at your credit score continuously, of course, they will ask for your permission but it’s not like you have an alternative. This is important when we realise that first check will impact your score.

This is not an entirely bad move from banks when you have peace of mind knowing that you have an outstanding, flawless credit history. It actually can make it better.

Who takes care of late fees?

There’s a delay in accounting and they have not paid the creditor yet? This can end up in you paying for late fees.

The type of agreement between you and your employer is what decides if you have to pay late fees or not. Remember that if it’s your duty to pay the bill and then get the reimbursement, your employer has ways to find out if you have incurred in late fees. If you must pay as part of the agreement, you need to know all the deadlines to file an expense report to avoid any trouble.

If you’re responsible for paying a corporate credit card monthly bill and need ways to boost your earnings or savings, you can check for any mis-sold Payment Protection Insurance from the past, especially now that the government is pushing banks to give the money back to their rightful owners.

Having a corporate credit card is a huge responsibility and not free money. If you have been granted one, use it wisely and responsibly just like if it was your own. Use your common sense to determine what constitutes personal expense from a business expense and keep building good relations with both lenders and employers.