Corporate Culture: Business Credit Card Deals

November 02, 2007

You have a steady white-collar job at some prosperous large company. You are quite satisfied with your income level and your work is just what you have been dreaming of. Most surely the management team offered you to make a corporate credit card deal that covers all your business-related expenses. Isn't it great? You spend money, the company pays for the charges.

Only in case you stick to the right money management policy. Business credit cards might seem the most beneficial offer for a successful business person. Actually, it can lead you to debtor's prison and ruin your carrier if you are not aware of the pitfalls you might come across using your corporate card.

A business credit card enables you to buy business-targeted equipment, facilities, and services separate from your personal merchandise. Whether your job is concerned with frequent business trips, or you need to make a great deal of business-related purchases, your business card covers all the expenses. And that is really profitable for you. You do not have to pay the interests and fees for such purchases made for the sake of the company.

Business cards generally come with highly beneficial rewards programs. However, the company, the head of the company, to be more precise, is the one to get all the perks. Ok, that is quite understandable and fair. The company pays off debts and gets some extra bonuses.

Every business credit card holder's account has a certain credit limit, which you should better not overdraw. Otherwise, you will end up paying off enormous debts with some really high interests, not to say that you might get fired.

So, as a reasonable credit card holder before making a corporate credit card deal read very carefully all terms and conditions, especially those in the fine print. If you still have some misconceptions about the deal ask the manager a few questions, or even consult a financial expert.

What exactly you need to know to avoid getting into a trap. First, find out what repayment policy the company sticks to. If the company uses centralized billing you can use a credit card from Chase Bank, Citibank or some other. The bills for you purchases are sent to the company. In this case you can feel safe about your personal finances, they will by no means be involved.

But every dollar you spend with your business card is watchfully traced. Your every financial misstep, like irrelevant spendings or exceeding your credit limit, will be strictly punished. Again you risk losing your job.

Another repayment policy some companies introduce is individual billing. It is very popular with large companies with thousands of staff members. This system implies sending a bill straight to an employee. Then the worker uses his or her business credit card to pay for the charges.

That is where you need to be extremely careful and reasonable. In case you receive your bill before the company's check was sent to the bank, you are to cover the company's expenses by sacrificing your personal finances. As spendings of this kind are unexpected and unplanned, your chances to overdue or, even worse, to miss the payments are very high.

In this case you will be charged high interest rates, late fees, which will not be compensated by your company. As well as you will have to pay for over-limits and cash advances. This money is taken out of your own wallet or your personal credit card, to more exact. Under such circumstances you can easily damage your credit score.

Now you know all virtues and shortcomings of business credit card deals. And being well-informed means being ready to escape all the traps and resist destructive temptations that might cause serious financial problems. Weigh all pros and cons and make the right choice of a wise credit card holder.