You’ve likely heard of a small business credit card, but you may be less familiar with corporate credit cards. There is a difference, and the difference is important when considering applying for a corporate card. To put it in the simplest terms possible, a small business card is much like a personal credit card in that it appears on your credit report and you personally are liable for the balance. A corporate credit card, on the other hand, is used to keep business expenses completely separate from personal expenses. The card does not appear on your credit report and, unless there is a clause stating otherwise, the business is held liable for the balance. Corporate cards are commonly used by larger businesses to offer employees easy access to funds for business related expenses, such a travel fees, gas, or hotel bills. OK, that being said, let’s look at one of these corporate cards a bit closer, the American Express Corporate Card.
What does the American Express Corporate Card have to offer?
Corporate cards, just like other credit cards do often offer rewards programs. In fact, if you are a large enough company you may be able to work out a special deal just for your company, though this is more likely with very large corporations that excessively use credit. The American Express Corporate Card offers two major benefit options. I do mean options, you have to enroll in these programs after your business is approved.
The Membership Rewards Program:
The first of these two benefits is a point-based reward system most of you have likely encountered with your personal credit cards. You gain points for each dollar spent on the credit line which can later be redeemed for goods, statement credits or even transferred to frequent flier miles programs.
Each dollar spent earns 1 point with an American Express Corporate Card, which isn’t all that generous in comparison to most personal card programs, but it’s something, and with the type of spending most corporations do, it adds up fast. This program does, however, have a $90 annual fee.
The Savings at Work program (SaW):
The second optional rewards program for the American Express Corporate Card is the Savings at Work program. This option is likely to be more beneficial to businesses than the membership rewards option, but you can enroll in both.
The SaW program offers discounts at the point of sale on certain items as well as annual disbursed rebates for some purchases. The offers within the SaW program vary, but at this time (Jan, 2014), to give you an idea, they have offers such as 15 percent off at Enterprise Car Rentals, 5 percent off at Fedex, 75 percent off Fedex Freight, 5 percent rebates at Fedex Office, various restaurant discounts, hotel discounts, office supply discounts, and more. The categories for these offers are very business-centic including travel, dining, and business supplies. There is no annual fee with the Savings at Work program, but for some offers you have to navigate to the site an access the offer within the SaW program there to activate it. For some business owners that will reduce the value of the program, as they may not have time to stay on top of and activate new deals. American Express must have thought of this, because they also offer TripCase, a mobile app that notifies you when a card benefit may apply to you purchase.
In addition to these two main rewards offerings, the American Express Corporate Card also comes with a few other small benefits including:
-The Global Assist Hotline: This allows all authorized card holders to contact a helpline 24 hours a day for things such as interpretations, emergency travel, or documentation help. Use of this line is free, but any third-party services rendered as a result are not.
-Emergency Fund Access: This allows card holders to use their American Express Corporate Card as an ATM card in emergencies. This option must be arranged in advance so a pin can be provided and a bank account linked for withdraws.
-Business Travel Insurance up to $350,000
-Baggage Insurance: Coverage is up to $1250 for carry-on luggage and $500 for checked luggage.
-Mobile account access and a receipt capture app to simplify your accounting process.
-A choose-your-bill-date option
-Automated expense reports based off card spending
What does an American Express Corporate Card cost?
Here’s where things get a bit murky, you won’t actually know until you apply. The American Express website simply states “varies” under the annual fee for this card, and for almost all of their other corporate cards as well. The two cards that they do offer a set fee for, the American Express Corporate Gold card and the Corporate Platinum card, incur a $125 and $395 annual fee respectively, as there’s a big difference between those two fees, it’s hard to estimate what you can expect on a American Express Corporate Card, but I will say the American Express Corporate Card offers fewer benefits than both of these cards, but is far closer to the American Express Gold card in nature.
The site makes no mention of APR or fees, which suggests to me these are also variable and based on individual applicants. I’ll throw in here that the review world is ripe with complaints that American Express has high rates, and likes to periodically raise their rates for no reason. Many long-term card holders have also reported massive penalty APR increases for a single late payment in 20-30 years of use. These review clearly cannot be validated, but their sheer number makes it a consideration.
The American Express Corporate Card allows you to choose upon sign-up whether you want the company to be liable for the balance on the card or a joint liability for the business and the card holder. With this option, each employee would share liability for the card they hold.
Unfortunately, that’s all the more I can offer you in the “cost” category.
Are corporate cards like the American Express Corporate Card a good idea?
In the end whether or not a corporate card such as the American Express Corporate Card is a good choice for you really depends on your circumstances. If you want to keep your business and personal expenses absolutely separate, they can be a great option and can protect you as the owners credit score to some extent. They are also well-suited to businesses with multiple employees who require the use of company funds frequently. It is, however, important to keep in mind that they can be expensive and terms vary by application, so it’s difficult to determine what to expect. Also, keep in mind that while the actual credit line does not appear on your credit, the inquiry for the card will.