Corporate Credit Card for UK businesses: a Practical Guide

Paola Faben Oliveira

It is common that employees may need to spend on the company's behalf, like buying coffee for clients or booking flights. Historically, businesses did it with receipts and manual entries in an expense sheet.

Thankfully, we have better solutions available nowadays. One of these solutions is a corporate credit card. It makes the overall process much more efficient and helps track expense management.

In this article we break down the differences between a corporate credit card and a small business one, types of credit cards, main UK issuers and an alternative that can fit your business better: Wise Expenses Card

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Wise Business expenses card

📝 Table of contents:

What is a corporate credit card?

Corporate credit cards are a type of credit card given to employees by business owners to incur business-related expenses. They are designed for large corporations to manage business expenses in an efficient way. Banks and other issuers provide them to the business entity, not the employees.

They are generally issued to corporations with established creditworthiness¹. However, small businesses with solid revenue streams are also eligible.

Corporate credit card vs. small business credit card

The basic difference between small business and corporate credit cards is which party is responsible for payments, fees and other charges. In a corporation, it is the company that bears the liability. In contrast, the main cardholder (business owner) is personally liable for small-business credit cards².

Corporate credit cardSmall business credit card
Ideal for bigger companies.Ideal for sole traders or small business.
A good credit score is essential.It is available for all sizes of businesses with a solid personal guarantee.
Doesn't require a personal credit check.May require a personal credit check for the business owner.
The company has the liability.Business owner has the liability.

How do corporate credit cards work?

Corporate credit cards work similarly to small-business credit cards in many aspects. Both cards can be used to buy things and generally provide businesses with perks like cashback or bonus airline miles depending on overall employee spending.

However, corporate credit cards have various benefits that small-business credit cards do not. In addition, the corporate credit card provides businesses with extensive insights into how employee spending functions on an individual basis and helps in setting credit limits. It also helps detect fraud before it becomes a problem for the company.

Payment Process

The payment process and terms for corporate credit cards are slightly different than typical credit cards. You can't carry a balance from statement to statement. Instead, you must pay the amount in full by a specific date. There are fines and interest incurred when the payment is not made on time.

Benefits of corporate credit cards

If you're thinking about moving your small business credit card to a corporate credit card, here are some of the benefits:

  • Easy expense management
    Expense management is always a challenge for large corporations. That's why the most obvious benefit of a corporate credit card is that it allows easy and efficient expense management integrated with online tools and software.
  • Rewards programs
    Most card issuers offer perks like special discounts, travel miles, cashback, access to airport lounges, and so on. It mainly depends on the rewards programs offered by corporate card issuers.
  • Control over spending
    A corporate credit card enables the corporation to manage employee spending and eliminates the need for reimbursements. Credit limits to help keep employee spending under control.


Types of corporate credit cards

There are two main types of corporate credit cards: Individual liability and corporate liability. The main difference is whether the employee or the business entity will be liable for paying the credit card bill, charges, or fines. Let's break down these two types:

Individual liability cards

As the name suggests, the repayments and other charges are paid by employees who use credit cards.

Here's how it works:

The employee will spend money on approved business expenses like travel, hotel, and even inventory. On the financial closing date, the employee will submit an expense report to their finance team. They will then check the records and make reimbursements accordingly.

Now, let's discuss some of the pros and cons of individual liability cards:

Pros of individual liability cards
  • They are an efficient method for employees to keep their business and personal expenses separate while streamlining the reimbursement process.
  • They allow evaluation of credit limits on each card, and individuals are exclusively responsible for the repayments.
  • The issuer of corporate credit cards will need to check the employee's creditworthiness before granting them a card. The credit report they run for this sort of card, however, has no effect on the employee's personal credit score.
⛔️ Cons of individual liability cards
  • The reimbursement process becomes stressful for both finance teams and the employees.
  • The liability rests on the shoulders of employees which might make them uncomfortable.

Corporate liability cards

In this case, the business entity or the corporation is liable for the repayment of debts and other charges. However, employees must still disclose any business expenses incurred with this employee card.

Here's how it works:

An employee will spend money on the approved business expenses on behalf of the company. The software records payments on corporate liability cards on the company's credit card accounts. This separates the employees' personal finances while allowing the finance teams to individually monitor and track corporate credit card usage.

Here is a list of the pros and cons of corporate liability cards:

Pros of corporate liability cards
  • Expense reporting becomes easy for employees and finance teams with no reimbursements.
  • It allows expense management on an individual basis with an option of setting credit limits for controlling employee spending.
  • It offers different perks and rewards on purchases and freedom for employees to make quick decisions on business expenses.
⛔️ Cons of corporate liability cards
  • The eligibility criteria in terms of revenue and creditworthiness make it difficult for smaller businesses to access corporate credit cards
  • Rationality on employee spending with this freedom is severely tested as the liability lies with the corporation. In simple terms, there is a temptation to spend more.
  • The process of acquiring corporate credit is exhaustive and lengthy.

Main corporate credit cards issuers in the UK

Unlike personal or small business credit cards, corporate credit cards can have extensive application processes. The issuers generally ask you to present your company's revenue and spending to know if they are high enough to justify obtaining a corporate credit card.

In addition, an issuer can ask for a financial audit as part of the application to check eligibility criteria which is different compared with a personal and small business credit card.

Here is a list of 5 issuers for corporate credit cards in the UK:

1. The American Express Business Gold Card³

Maximum credit: it is a charge card, so N/A
Representative APR: N/A
Fees: free for the first 12 months, then 175 GBP after that

2. Capital On Tap⁴

Maximum credit: up to 250,000 GBP
Rates: 9.9% APR
Fees: unlimited cards for your company with no annual fees

3. Metro Bank Business credit card⁵

Maximum Credit: not stated
Representative APR: 14.9% APR
Fees: no fee (in Europe)

4. Barclaycard Select Cashback credit card⁶

Maximum credit: up to 25,000 GBP (subject to status)
Representative APR: 21.9% variable APR
Fees: no annual fee

5. Wise Employee Expense Cards

Wise offers a business multi-currency account and Employee Expense Cards as an alternative for corporate credit cards to let your employees spend money on business expenses while keeping their personal transactions separate.

Wise Business account allows you to order unlimited cards for your staff, and you can place spending limitations of your choice. It has a one-time cost of 3 GBP per card, and you can integrate your expense management tools like Xero, FreeAgent or Quickbooks.

Get started with Wise Business

How to request a business credit card?

The process for requesting a business credit card for most providers is quite exhaustive as it is not online. Your finance team must meet with the issuer's dedicated manager to learn about corporate business credit card features and offerings they can provide.

On the other hand, Wise Business Account has an online process and a verification process of 2-3 working days. It works with all sorts of businesses, from freelancers and entrepreneurs to larger corporations.

How to manage corporate credit card expenses?

As a corporation, putting in place a strong expense management system can protect your business.

An employee card can help you streamline and save some of the costs. Although, using it without an expense management system might expose your company to mismanagement and fraud and leave you with a bad credit score.

You can use these practices to manage your corporate credit card expenses:

  • Customise your credit cards functionality
    Some of the functionalities that should be simple to implement include: the ability to change employee spending limits, block cards, create new cards, and so on.
  • Streamline your expense reporting system
    It is a reliable approach to ensure that expense receipts correlate to the right employee card transaction on time and makes the reconciliation a breeze.
  • Build employee confidence
    Employees are the individual owners of the cards. Therefore, picking an employee card that meets their demands is critical. Pick a card that is simple to use and needs no additional effort.

Business credit card policy

Business credit card policies are part of a company's accounting policy and establish a clear set of rules for employees. It saves a lot of time with tracking employee personal spending and helps to avoid fraud.

Here are examples of expenses management software that can be helpful:

  • Concur Expenses allows business owners and finance teams to track employee spending. It also provides invoicing tools, data insights, and specialised products for public sector organisations.
  • Webexpenses is a cloud-based web platform and app for expense management. It's intended to monitor spending and make financial reporting easier for both finance teams and employees.
  • Xero expenses is an expense management software to process employee reimbursements. Finance teams and employees can submit pictures of receipts to make expense claims simple, fast, and online.

Other business cards options

If a corporate credit card is not serving your business in the way you want, there are more options to explore, like:

  • Debit cards
    You can use the Wise debit card to spend in several currencies and at the mid-market exchange rate. In addition, you can get employee cards for your team to use globally with no foreign transaction fees.
  • Prepaid Cards
    You can use a prepaid card with cash preloaded on it. You can give it to your employees, and they can use it to spend up to the limit.
  • P-cards or Purchase Cards
    You can also give a P-card to your employees for purchasing on behalf of the company.

Alternative to corporate credit cards: Wise Expense Cards

The Wise Expense Cards work differently from an average corporate credit card. Expense cards are made for easy tracking of employee expenses.

Using the Wise Expense Cards, employees can make international business payments no matter where they are in the world. The cards work in multiple currencies, have zero subscription fees (there is only a 3 GBP one-time fee per card), and allow employees to avoid having to spend on their own cards.

Wise expense cards also come with a lot of admin options. This allows companies to set spending limits and have complete control over their employee expenses. They are designed to make accounting as simple as possible, so you can focus on the growth of your business.

Get started with
Wise Business expenses card

Having some type of business card can contribute to sorting finance and spending management. Just make sure you have the right type of card and the necessary tools, information and services you require to acquire it.

Bear in mind that the best corporate credit cards allow you the integration of several accounting and finance tools. Plus, it allows you to earn cash back with perks, which may rapidly mount up if your company spends a lot of money on business expenses each month.

Sources used in this article:

  1. What is creditworthiness? | The Motley Fool UK
  2. Small Business Credit Cards vs. Corporate Credit Cards
  3. Business Gold Card | Charge Card | American Express UK
  4. Apply for a Business Credit Card | Capital on Tap
  5. Business Credit Card - Metro Bank
  6. Barclaycard Select Cashback Business Credit Card review 2022 | 21.9% rep. apr | Finder UK

Sources checked on 26/10/2022

Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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