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How small business credit cards differ from corporate cards

By Ben Woolsey

When you say business credit card, the world of options can be a bit confusing. The largest market for business credit cards tends to be the small business person. And this only makes sense – the small business sector is the driving engine of the U.S. economy and creates the lion's share of new jobs in this country each year. The major issuers of Visa, MasterCard and American Express consumer credit cards have created products specifically for the small business sector and their unique payment needs.

But what are the credit card options for larger companies, nonprofit organizations and government organizations that need an efficient method for procurement of goods and services? There certainly are credit card product options for these types of entities, but they are often custom-tailored options provided by certain issuers rather than an off the shelf, prepackaged product. This is why consumers and small business people don't see corporate or fleet purchasing card products advertised in traditional media.

These products are normally sold to client organizations and government entities. The options could best be compared to insurance health plans in that they are provided by large and for large organizations and managed through an assigned account management team to meet the ongoing needs of the client organization. The card payment needs of Fortune 500 companies along with large charitable organizations or even city, state and federal government departments can be quite complex. Beyond mere payments capabilities these types of organizations often need to track, review, approve and reimburse their employees travel and entertainment expenses through complex, custom-designed software programs that often must interface with human resources platforms.

Another primary distinction between a small business credit card and a large organization corporate card involves payment responsibility. Small business credit cards are issued in the personal name of the small business principal, although his or her  business is jointly responsible for keeping the business account current. Corporate cards are normally issued in the name of the corporation, nonprofit or government entity name. Liability for repayment is placed upon the organization, not the individual or individuals using the cards. The secondary repayment responsibility between the company and its employees is set and enforced using human resources policies.

So, while the differences between the types of credit cards used within the business world can be a bit confusing, it's probably a safe bet to assume any card advertised in the mass media or online is designed for the small business person.

Published: July 21, 2005


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