To provide financial control over travel bookings, many large businesses charge travel to corporate credit cards - cards that are assigned to the businesses specifically for business purposes, where the company can pay the monthly bill and review all charges.
There are many different types of corporate credit cards, but here are some of the most often used types:
If a company is going to invest in a corporate credit card system, there needs to be a variety of benefits in place, both for the organization and the traveler.
Some typical corporation benefits include:
A company can use the rewards it accumulates to incentivize productive employees, or to save on further travel costs, among many ideas. The flexible payment dates and additional accounting options allow for companies to ensure their employees are spending properly, and to easily keep track of expenses for tax purposes.
For the traveler, some benefits can include:
When an employee travels, you want them to be as productive as possible. Providing them lounge access allows them to check up on emails before a flight, or to continuously work on a project, even when not onboard a plane. Elite status at airlines and hotels allows a traveler to feel valued, even if they aren’t traveling frequently with a particular brand -- plus, these status levels often save the company money, where they don’t have to pay for breakfast, upgrades, or additional services.
For travelers, using a corporate credit card means they’ll earn less rewards on their own personal credit cards. In addition, if the corporate credit card provides limited benefits, depending on the personal cards the employee owns, they may miss out on lounge access, fee waivers, status and more.
For the companies, corporate credit cards often require long historied financial standing -- if you’re not a large enough company, it may be difficult to get a corporate credit card, much less powerful benefits and spending tools.
Each company will have their own financial policies for how to handle corporate credit cards, but there are definitely pros and cons to each side. In general, it’s mostly advisable to have a centralized spending system - not only is this a better administrative option for companies, but it also provides perks and benefits to employees without having to utilize personal credit cards.