How do corporate credit cards work?

As your business scales, corporate credit cards can be an invaluable tool for expense management. Not only do they streamline employee reimbursements, but they can also provide robust controls and real-time spend tracking.

In this guide, we’ll break down how corporate credit cards work, how they differ from traditional business credit cards, and the key benefits they offer. We’ll also cover common card types and best practices for implementing them effectively.

What are corporate credit cards?

Corporate credit cards are company-issued cards that employees can use for business-related spending. For example, your team might use them to pay for travel to a company conference or renew a software subscription necessary for operations.

One of the primary advantages of this set up is that it significantly streamlines the employee reimbursement process. 

Instead of funding each business purchase with a personal credit card and requesting reimbursement, workers can simply use their company credit card and move on.

This approach reduces waiting periods and administrative friction. Employees don’t have to track receipts manually, submit expense reports, or wait weeks to be reimbursed after covering costs out of pocket.

The best corporate credit cards also benefit employers in ways that go beyond happier employees. For example, companies gain stronger control over spending and clearer visibility into how, where, and when employees use company funds.

Most corporate card programs include built-in controls to support this oversight. Finance teams can set spending limits, restrict merchant categories, and monitor transactions on employee credit cards in real time, helping to prevent noncompliant activity.

Key differences between corporate and business credit cards

Corporate credit cards and business credit cards may appear similar on the surface, but there are very different things going on under the hood. Here are some of the most important distinctions between them:

• Purpose: Business credit cards are primarily for the business owner’s spending, with more limited controls for additional users. Corporate credit cards support employee spending across teams, with finance maintaining centralized oversight. 
• Eligibility: Business credit cards often rely on the owner’s personal credit score. Corporate credit cards evaluate the company itself, typically focusing on revenue, cash flow, and financial stability rather than your personal credit history or business credit score.
• Repayment: With business credit cards, the owner typically manages payments directly. Corporate credit card programs consolidate charges at the company level, allowing finance teams to handle repayment. They may also prevent you from carrying a balance, like a charge card.
• Features: Business credit cards offer basic expense tracking and card controls. Corporate cards emphasize features like real-time transaction monitoring, role-based permissions, and integrations with accounting and ERP systems.
• Rewards: Business credit cards often highlight cash back, points, or travel rewards. Corporate cards prioritize operational efficiency, compliance, and visibility. Rewards typically play a smaller role in their value proposition.
• Liability: Business credit cards usually place liability on the business owner through a personal guarantee. Corporate cards often assign liability to the company itself, depending on the provider and program structure.
• Company size and structure: Business cards work best for small businesses and owner-led teams. Corporate credit cards serve mid-sized and large organizations that need to manage spending across many employees.

If you’re interested in more traditional business card options, read our guide to the best Startup Credit Cards.

Types of corporate credit cards and liability models

Corporate credit cards typically fall into two main categories based on who holds responsibility for repayment.

• Corporate liability: The business assumes responsibility for employee charges. In this model, employees use the company card for approved expenses, but the business pays the balance directly to the credit card issuer.
• Individual liability: With this model, employees are legally responsible for paying their balances and must submit expenses for reimbursement, even though the card connects to a corporate program.

Corporate liability cards have become the default for many organizations. They simplify accounting, reduce friction for employees, and allow finance teams to enforce spending rules without tying repayment responsibility to individual cardholders.

However, some companies still use individual liability cards for various reasons. These may include meeting industry regulatory requirements or encouraging employees to be more disciplined with their spending.

Beyond liability models, corporate cards can also differ in functionality, further distinguishing them from traditional business credit cards. Here are some of the most common variations:

• Category-limited card: These cards restrict spending to specific categories, such as travel, fuel, meals, or office supplies. This can help companies reduce misuse and enforce tighter expense policies.
• Prepaid card: Prepaid corporate cards load a fixed amount of funds in advance. Companies often use them for one-time purchases, short-term projects, or controlled employee stipends.
• Virtual card: A virtual card is generated electronically without a physical card. Finance teams can create them instantly, set a precise credit limit, and use them for online purchases or vendor payments.

Benefits of corporate credit cards for your company

Employees may be the primary users of corporate credit cards, but many of the biggest benefits they provide are for your company. Here are some of the most significant:

• Enhanced expense management: Corporate cards automate expense tracking and integrate directly with accounting software. This reduces manual reports and creates cleaner records for budgeting and tax preparation.
• Enhanced spending control: Finance teams can customize spending caps and other limits on employee cards. Virtual cards also make it easy to approve one-time purchases without exposing broader accounts.
• Real-time visibility: Corporate cards provide instant access to transaction data as spending occurs. This insight can help finance leaders monitor trends, spot issues early, and make better informed cash flow management decisions.
• No personal liability: Eligibility for corporate credit lines typically depends on the company’s financial profile, not the personal credit of its owner or employees. This removes the need for personal guarantees tied to business spending.
• Ability to earn rewards: While typically less robust than traditional small business credit card rewards, some corporate card programs offer cash back, points, or statement credits that can offset costs.

Setting up and managing a corporate card program

If you’re ready to implement a corporate card program, start by choosing a card provider that suits your complexity. Look for strong integrations, flexible spending controls, real-time reporting, and other features that fit how your finance team operates.

Next, develop a clear and comprehensive policy. This should explain why the cards exist, who can use them, and exactly what types of expenses the corporate credit card program is designed to support.

The corporate credit card policy should also clearly outline employee responsibilities. Your team needs to understand what’s expected of them, including allowable card usage, receipt requirements, and other reporting guidelines.

Make sure to offer training to employees before and after go-live. Walk them through the policy, show them how to use the card platform, and explain how the system integrates with accounting and other financial software. 

Similarly, it’s important to open clear support channels so employees can escalate and resolve issues promptly. 

Once the program is implemented, you can set up spending controls based on employee roles, departments, or expense categories. However, it may be more efficient to delegate most of this work to individual team leaders.

Going forward, remember to audit the system regularly. That should include reviewing whether your spending controls, support systems, and other aspects of your policy are working as intended. 

As your operation grows, you may need to update certain aspects to reflect your evolving business needs.

Best practices for corporate credit card use

Corporate credit cards can be invaluable expense management tools, but they’re not a magic bullet. Here are some best practices for corporate credit card use to help you maximize the benefit of your program:

• Build a comprehensive policy: Try to anticipate areas of confusion before they arise. A detailed policy that clearly addresses spending rules, approvals, and edge cases reduces the likelihood of accidental and purposeful misuse.
• Require business-only use: Avoid mixing personal and business card transactions. Even small personal charges complicate reconciliation, create compliance issues, and increase your administrative burden.
• Limit the number of card users: Issue corporate cards intentionally, not automatically. Assign them only to employees who regularly incur business expenses, and review cardholder lists periodically as roles shift.
• Enforce receipt deadlines: Set clear timelines for submitting receipts and follow through when employees miss them. Consistent enforcement encourages accountability and helps prevent policy violations from becoming a habit.
• Provide sufficient training: Many companies underestimate the change management required for a new card program. Ongoing training helps ensure employees understand expectations and how to use the system correctly.

If you’re looking to streamline your spend management, Zeni can help. In addition to full-service bookkeeping, subscribers gain free access to an AI business credit card with unlimited virtual cards, real-time expense tracking, and 1.75% cash back.