What is an Employee Credit Card?
29 January, 2025
Synopsis
- Employee Credit Cards facilitate staff expenditure on behalf of a company.
- They provide business proprietors and managers with improved visibility and control over this spending.
- This approach can potentially bypass the inconvenience and expense associated with processing expense claims and reimbursements.
Employee Credit Cards are a specific type of authorised user card designated for employees to incur business-related expenses. Each card is allocated to an individual employee and is linked to the company's Credit Card or prepaid business card account. Businesses can acquire these Employee Cards from their card issuer, typically without any additional charges. The number of employee cards a business can obtain is generally unlimited, depending on the issuer's policy.
How Different are Employee Credit Cards
The terms and conditions of these Employee Credit Cards mirror those of the company's main business Credit Card. These cards offer an interest-free period, usually around a month, allowing the full statement balance to be paid without incurring interest. Should there be any remaining balance post this period, interest will be accrued at the annual percentage rate (APR) of the business card.
As with most Credit Cards, Employee Credit Cards operate on a revolving credit basis. This means the available credit is replenished once payments are made, up to the set credit limit. To maintain a check on expenditure, businesses have the option to set individual credit limits on these cards. These limits are often lower than the main business card's limit but cannot exceed it.
How Employee Credit Cards Streamline Expense Management
Corporate Credit Cards for employees offer several advantages for small businesses in monitoring and managing employee expenditures effectively:
Real-time spending overview: Card issuers typically provide online tools or mobile applications, enabling business managers to instantly view employee Credit Card transactions. This facilitates immediate action if any purchase contravenes company policies.
Receipt matching and categorisation: Managers have the option to align photographs of receipts taken by employees with transaction records. This aids in classifying purchases into relevant expense categories, simplifying tax return preparations.
Budget planning assistance: The central record of employee Credit Card transactions maintained by the business can be a valuable resource for owners and financial managers in budgetary planning.
Fraud protection: Employee Credit Cards usually come with fraud monitoring services provided by the card issuer, adding an extra layer of security against fraudulent activities.
Employee Credit Cards to Build Credit
As a Corporate Credit Cardholder within a sizable company generally won't significantly impact your personal credit. This is because the utilisation and payment details of a Corporate Credit Card are typically reported under the business entity rather than individual cardholders.
Corporate Credit Cards vary in their terms and conditions. While some cards hold only the business accountable for clearing charges, others may share liability jointly among the cardholders.
Cost Savings via Employee Credit Card Usage
Corporate Credit Cards for employees can also maximise savings with its numerous offerings:
Cashback rewards: These might include a percentage of return on specific purchase types like office supplies and fuel.
Rewards points: Accumulation of points on certain expenditures, such as airline tickets and hotel bookings.
In-kind rewards: Benefits like airport lounge access or complimentary travel insurance are available directly to the cardholder.
The cashback and reward points accrued through employee spending are generally credited to the main business account. The company can utilise these rewards to cover various business expenses, be it procuring new equipment or offsetting other business costs.
Employee Credit Cards with HDFC Bank
At HDFC Bank, we help businesses streamline their employee expenses with our Corporate Credit Cards. As a business owner, you can manage your corporate travel and entertainment expenses with the Business Corporate MoneyBack Credit Card, Corporate Platinum Credit Card, Corporate Premium Credit Card and more. Cardholders can enjoy perks like reward points, complimentary access to airport lounges and insurance cover, to name a few.
Check out a range of HDFC Bank Commercial Credit Cards.
Disclaimer: *Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals at the sole discretion of HDFC Bank Limited. Credit Card approvals is subject to documentation and verification as per Bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.
