Since February 2018, 9.13 million credit cards were added, bringing the number of credit cards in operation to 46.1 million by February 2019, confirms Reserve Bank of India. These statistics, to a great extent, indicate that India is becoming debt-friendly and individuals are gradually inclining towards digital money over cash.
Keeping up with this trend, several established companies are allotting customised credit cards to their employees, with such cards popularly named as corporate credit cards. These payment tools are starkly different from personal credit cards, in terms of credit card interest rates and other aspects. Therefore, while choosing the card, it is imperative to know the differences between these two types of cards to maximise the benefits.
What is a corporate credit card?
The rising demand for a credit card has compelled several card issuing institutions to introduce a wide range of cards to cater to different consumer requirements. A corporate credit card is one of a type that financial institutions issue to established companies. Further, these companies provide the card to their employees to bear business expenses.
Using the card, corporate business owners can make payment for various expenses such as hotel stays, flight tickets, etc. as per company norms. Using this card, both employees and corporate businesses can be benefited in the following ways.
For employees
- Employees don’t need to pay business expenses from their pockets.
- They don’t need to block their personal funds until the company reimburses the amount.
- Employees do not need to submit the bills and receipts to the company.
- Using the card, employees can draw a host of benefits like earning reward points on transactions, availing emergency loans, etc. For corporates
- Companies can keep track of all the business expenses that allow them to cut down unnecessary costs.
- A company can limit the amount per transaction and complete such transactions with ease.
Therefore, while the features of corporate credit card and personal credit cards seem similar to a great extent, there are some differences that you need to consider. Along with that, irrespective of the credit card you choose, it is the credit card interest rate calculation that you must know about before applying for one.
How are corporate credit cards different from personal credit cards?
Following are some of the aspects where a corporate credit card differs from a personal credit card.
- Interest rates
While corporate credit cards are primarily used for business purposes, financial institutions generally charge higher credit card interest rates on corporate cards as most of them come with no limit on maximum spending capacity. Since a personal credit card is strictly regulated, it has a cap on the spending limit, thus comparatively lower interest rates.
- Repayment facility
Cardholders need to pay their personal credit card bills, following a particular process. A bill will be issued in their name, and they have to pay either the full amount or minimum balance amount within the due date.
On the other hand, corporate credit cardholders can choose any of the following ways to repay their credit card liabilities.
- Corporate liabilities
Here, you can use the credit card, and the business providing it to you will be liable to pay the bills.
- Individual liabilities
In this provision, the employees need to pay the credit card bills initially, and the company reimburses the amount later.
- Joint liabilities
As the name suggests, here you and your company both will repay the debts. However, on default, your credit score will decrease significantly.
Nonetheless, you can also avail a personal credit card on top of a corporate credit card. In that regard, you can consider options like SuperCard that can be used for multiple purposes.
The issuer of the concerned card also provides pre-approved offers that provide customised advances and facilitate instant approval. These offers are available on a range of financial products, including business loans, personal loans, and others. All you need to do is enter your name and contact number to check your pre-approved offer to leverage the credit using the card.
Therefore, while different types of credit cards are available in the market, it is vital to compare the credit card interest rates. One compared, you can proceed to choose the right credit card for yourself. It will hence facilitate easy online transactions and allow you to pay the bills conveniently without any fail.
