What is a corporate credit card?
Corporate credit cards are commonly used by large businesses and organisations as a way of making business payments, managing cash flow and enabling staff to pay for expenses. They're usually only offered to businesses with a high turnover (e.g. over $10m), or businesses that require a large number of employee cards.
For smaller companies, a business credit card facility is usually sufficient.
In many cases, corporate credit cards are in fact charge cards. In fact, if you have a corporate card from either American Express or Diners Club it will almost certainly be a charge card.
Money.com.au’s credit card and payments expert, Brad Kelly, says there are some significant benefits for large companies that use charge cards as their corporate cards.
Expert's view on corporate cards
"Unlike a credit card, a charge card is not a liability on your balance sheet, it’s an expense. If you are tying up your balance sheet with credit card liabilities, it reduces your working capital. For a large corporate with 500 cards issued to staff, that could be tens or hundreds of millions of dollars in a revolving credit facility. A charge card doesn’t do that. It's a much more efficient utilisation of your balance sheet."
Who offers corporate credit cards in Australia?
The main providers of corporate credit cards in Australia are:
- American Express
- ANZ
- CommBank
- HSBC
- NAB
- Westpac
While some of these providers advertise specific corporate cards with features, rates and fees shown, when it comes to corporate clients, most of these providers will offer bespoke programs with tailored rates, terms and benefits.
Note Diners Club no longer offers charge cards in Australia.
What you can get with a corporate credit card scheme
1
Rewards program
This offers your organisation the ability to earn credit card reward points on spending and access perks and exclusive offers. Some programs (e.g. Amex) offer you the ability to convert points to a number of different frequent flyer credit card programs.
2
Monitor spend and expense policy compliance
A good corporate credit card program will give your finance team the ability to track spending at a card level and assess it for compliance with company expense and travel policies.
3
Card-level limits
Corporate cards generally offer the organisation the ability to set individual limits on cards issued to different employees. For example, cards given to different levels of management.
4
Unauthorised use insurance
This protects organisations from misuse of their corporate credit cards and is sometimes included as a complimentary extra with corporate card schemes (e.g. CommBank).
5
Virtual cards
Having physical corporate cards can create hassle and security risk for organisations and is often not necessary depending on how the card is used. Some corporate card programs (NAB and HSBC, for example) facilitate the issuing of virtual cards to staff. This can either be a card that only exists on a digital wallet or a unique account and card number that’s generated for each transaction.
6
Integration with finance software
Most corporate credit card programs will offer integration with common financial software. Some providers do this better than others. They also usually give your organisation access to reports with detailed breakdowns on spending and payments, with forecasts that will help your finance team with planning.
7
Travel insurance
Some corporate credit cards include travel insurance that offers cover for a range of risks relating to corporate travel. This generally only applies to travel that was paid for using the card, although the cover provided through certain Amex corporate cards will apply regardless of whether the card itself was used to book the travel.
8
Lounge access
Higher-end corporate credit cards often offer access to airport lounges. The specific lounges you can access will depend on the card provider and the specific card you have.
9
Business subscriptions and other perks
Corporate credit cards often come with extras like media subscriptions or early access to corporate event tickets.
10
Dedicated support
As a corporate client, you typically have access to dedicated support from the card provider that is not available to small business or personal customers.
What fees are charged on corporate credit cards?
For corporate clients with large numbers of cards issued to staff, it’s particularly important to pay attention to card fees that are applied at an individual card level, such as:
- Annual card fee (per card)
- Rewards program fee
- Additional cardholder fee for issuing new cards
- Replacement card fee
Plus there are the usual credit card fees that will also typically apply to corporate cards, including:
- Foreign transaction fees (FX fees)
- Cash advance fees
- Late payments fees
Corporate charge card vs credit card: What's the difference?
| Charge card | Credit card | |
|---|---|---|
Purpose | Can be used for payments made online and in-store, both in Australia and overseas, with transactions paid off at a later date. | Can be used for payments made online and in-store, both in Australia and overseas, with transactions paid off at a later date. |
Credit limit | No pre-set spending limit. | Each card has a set credit limit. |
Days to pay off purchases | Charge cards come with ‘cash flow days’ – 55 days is the max available. | Offers ‘interest-free days’ which is the time period after a transaction is made before interest applies. |
Repayment options | The card balance must be paid off in full every month (unless there is a ‘flexible repayment plan’). | A minimum repayment must be made each month but cardholders can ‘revolve’ their balance from month to month. |
Interest | There are no interest charges but fees apply if the balance is not paid in full. | Interest is charged on any outstanding balance beyond the card’s interest-free period. |
Rewards | The card can usually be used to earn rewards points and access other perks. | Some credit cards offer rewards and perks, but there are also basic cards with no fees. |
