Types of Corporate Cards Available for Small Businesses

Credit cards have caused a stir since their inception and with their launch in the business world, entrepreneurs have gone wild. With a slight change in terminology, credit cards came to be known as corporate cards, and unlike business cards, which were only issued to big business owners, corporate cards were issued to businesses. They offer perks such as reward schemes for purchases, travel benefits, protection from fraud, and online account management. While companies, namely, JP Morgan, Capital One, and American Express usually target big businesses, there are corporate cards available for small businesses as well.

But are they necessary? Corporate cards available for small businesses allow them to regulate their monthly expenses and aid them during their initial phase when they are setting base in the market. So, while it is established that corporate cards are a helpful source of finance for them, what are the types of corporate cards available for small businesses? And the ones that suit them the best? The answer to these questions is spelt out below, so make sure you give it a read!

1. Revolve Credit Cards

Among the various corporate cards available for small businesses, revolving credit cards are the best ones. It allows repeated use over a specific limit, with the only condition that repayments are made from time to time. Each time you make a payment, your generated bill allows you to carry forward the payment. Specifically, revolving credit cards give you an option to pay a minimum amount for a month. The rest of the amount gets carried over to the next months; hence, the name “revolving card” as the balance gets revolved in the following months.

The amount and minimum payment vary with the payments made. Therefore, until the balance amount is repaid, the interest rate for a particular purchase would remain the same. Another advantage of corporate cards for small businesses is that you do not have to wait for the loan approval in times of financial crisis. Access to revolving credit cards means financial emergencies to be dealt with immediately.

2. Prepaid Cards

Prepaid cards are also a kind of corporate cards available for small business, allowing to practice fund management and curtail any unnecessary expenditure that can result from an over-enthusiastic leader. Unlike revolving cards and other credit cards, prepaid cards don't classify as credit cards because they need to be loaded with cash. Once you run out of balance, it is only then you will be able to refill it. Not only do they help in cutting down unnecessary expenditure but also are a great way to monitor financial activities.

Prepaid cards work best as corporate cards for small businesses because they can be used at all places of credit cards. However, you shouldn’t confuse corporate prepaid cards with other cards, such as gift cards, because unlike them they are suitable for long-term use.

3. Charge Cards

Charge cards are the basic type of corporate card. They are also one of the types of corporate cards available for small businesses but aren’t very user-friendly especially in small-scale businesses. Unlike revolve, cards, charge cards have a monthly cycle and require you to settle your payments within that month. If you fail to do so, a penalty is charged and you would have to make that additional payment with your former pending payment.

Charge cards also charge an annual fee and a good credit score is required to obtain it. Hence, making them a little out of the league for small-scale businesses. One of the perks of having a corporate charge card is that they come with a huge upper limit, thus making them a holy grail for businesses wanting to make big purchases.

4. Banks Offering Corporate Cards

Several banks offer corporate cards to both small- and large-scale businesses. Some of the renowned ones include:

• HDFC Premium Corporate Card
• HDFC Corporate Platinum Card
• Citibank Corporate Card
• The American Express Corporate Card
• SBI Platinum Corporate Card
• Induslnd Bank Corporate Card

Conclusion

Some people might think that corporate cards aren’t really necessary for small businesses. But isn’t financial backing always the reason why most small businesses take a backseat? The prevailing situation demands more support for small-scale businesses. Hence, having a type of corporate card that best suits your small-scale business and allows you to make appropriate financial decisions is a boon. With the above-mentioned article, you can get some information regarding the corporate cards available for small businesses and financial bodies that can offer such benefits.

If you wish to get more insights about the business world, you can visit OkCredit blogs and go through the informative bunch of articles on financial strategies, businesses during a pandemic, and governmental policies in various languages such as English, Marathi, Hindi, and Malayalam. So, download OkCredit today and always stay ahead in line.

Also read:

1) Best Tips for Customer Retention for a Small Business
2) Tips to Understand Your Market while Starting a Small Business
3) Tips for Businesses to Overcome the Covid Blues - Revival Tips for Businesses
4) What are the keys to success when operating a small scale business?
5) OkCredit: All you need to know about OkCredit & how it works.

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FAQs

Q. How long does it take to obtain a corporate card?

Ans. Corporate credit cards have an overall cycle of 15–25 days post-application. Once it gets approved, it is delivered within 7–10 days.

Q. What is the credit score required by a small business to get a corporate card?

Ans. An ideal credit score required to get a corporate card is 700. For small businesses to get a corporate card a credit score of 640–699.

Q. How are business credit cards different from personal credit cards?

Ans. Business credit cards are different from personal credit cards on several terms. While the former helps businesses in purchasing tools and benefits the business overall, the latter is suitable for personal purchases.

Q. Why are revolve cards better than charge cards?

Ans. Revolve cards are better than charge cards, especially for small-scale businesses because they don’t have penalty charges and annual charges. Hence, making them a pocket-friendly option for small-scale business owners.

Q. What kind of companies can avail of a corporate credit card?

Ans. Companies such as C-corp, S-corp, and LLC are eligible to apply for a corporate credit card.