Pros and Cons of Using a Centralized Corporate Credit Card to Book Flights

James Larounis

March 16, 2021


7 min read

What are centralized corporate credit cards?

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:

  • Corporate American Express Platinum card
  • Corporate American Express Green card
  • J.P. Morgan Chase Corporate Card
  • Citi Corporate card
Using a corporate credit card provides benefits to both corporations and travelers. (Source: Pxhere)

What basic benefits do corporate cards provide?

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:

  • Points, miles, and rewards for the organization - the more rewards a company accumulates, the more they can spend and save on expenses.
  • Increased spending power and high credit limits - especially with the large volume of business a corporation will be doing, it’s helpful to have a credit card with flexibility.
  • Flexible payment schedules - personal cards usually come with stringent payment options, but corporate cards can provide flexibility to accounting departments.
  • Record keeping and filtering options - this is a main pain point for travelers, and the easier it is to keep track of expenses, the better the relationship will be between the traveler and the manager.
  • Refund tracking -- with corporate travel, there’s always the need for tickets to be refunded, whether because of weather delays, mechanical cancellations or other t travel oddities. While it sounds easy to simply keep track of expenses, this can be incredibly difficult to do when you account for all of the nuances of travel, including these potential partial refunds.
A corporate credit card can be used to provide benefits to employees they otherwise may not have when using a personal credit card. (Source: Hippopx)

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:

  • Lounge access in airports worldwide - providing a comfortable atmosphere for employees to relax could increase productivity.
  • Travel interruption assistance - if a flight is delayed or canceled, you want that employee to get rebooked as quick as possible.
  • Free checked bags - this saves on expenses, and allows employees to bring as many bags as they feel comfortable traveling with.
  • Airline and hotel elite status, without having to meet the required thresholds - if you can hold elite status up front without flying, you’ll get perks without having to meet minimum thresholds.

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.

Cons of Using a Corporate Credit Card

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.

So, should you use a corporate credit card?

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.

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