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CEOWORLD magazine - Latest - Banking and Finance - The Dos and Don’ts of Corporate Credit Card Usage for Startups

Banking and Finance

The Dos and Don’ts of Corporate Credit Card Usage for Startups

Corporate credit cards

Corporate credit cards, when used judiciously, offer startups a world of benefits, from simplified expense tracking to accumulating rewards that can offset business costs. 63% of entrepreneurs who use a company card attribute their success, at least partly, to the freedom and flexibility corporate cards offer.

But, as with any power tool, there’s a right way and a wrong way to wield it. Let’s dive into the essential dos and don’ts of corporate credit card usage to ensure your startup sails smoothly through financial waters.

  1. Do Select the Right Card for Your Startup
    Finding the perfect credit card is like dating: it’s all about compatibility. For startups, that means picking a card that meshes with your financial goals. Compare features of different cards like rewards, low-interest rates, or even zero annual fees to get the most bang for your buck.
  2. Do Clearly Separate Business and Personal Expenses
    Mixing business and pleasure is a no-no when it comes to company credit card usage. By reserving your business card strictly for work-related expenses, you’ll have an easier time come tax season. Not only will your accountant thank you, but you’ll be prepared and safeguarded in the event of legal challenges or audits.
  3. Do Set Spending Limits
    Setting clear spending limits for those with card access — and establishing firm company spending guidelines — can save potential headaches down the road. Employees will benefit from knowing how much they can spend, whether it’s per day or per trip or per month. And they’ll benefit from clear rules on allowable charges, too. For example, can they upgrade their flight or purchase a new home office chair?
  4. Do Track and Monitor Expenses
    In our digital age, there’s no reason to waste valuable time manually tallying receipts at the end of the month. Opt for a company card with built-in expense tracking tools, ensuring every transaction is automatically logged and categorized. This not only streamlines the accounting process but also offers real-time insights into spending patterns, facilitating better financial decision-making.
  5. Do Leverage Rewards Programs
    Who doesn’t like free stuff? By selecting a card that provides cashback offers or other incentives — like Expensify’s Company Card, which gives you 2% cashback on everything — you can effortlessly generate funds that can be reinvested in the growth of your business.
  6. Don’t Carry High Balances
    Remember, just because you have a high credit limit doesn’t mean you should max it out. Carrying hefty balances can see your hard-earned cash gobbled up by interest rates. Instead, make timely and complete credit card payments every month. This not only avoids interest charges but also builds a positive credit history for your business.
  7. Don’t Overlook Credit Card Fees
    Every penny counts in the startup game. Be aware of credit card fees, whether they come in the form of yearly charges or per-transaction costs. Know what you’re up against, and plan your budget accordingly.
  8. Don’t Overspend
    Think of your business credit card as a strategic tool, not a blank check. While there’s allure in making big purchases, it’s essential to align them with your company’s financial objectives. After all, it’s not just about spending; it’s about spending smart.
  9. Don’t Neglect the Fine Print
    Ah, the dreaded T&Cs. While it might seem like a bore, understanding your card’s terms can save you from unexpected surprises. From interest spikes to penalty fees, knowledge truly is power.
  10. Spend Smarter, Not Harder
    Credit cards are more than just a payment method; they’re a strategic tool for growth. As you journey from startup to industry leader, remember these tips to ensure your card remains an asset, not a liability. By exercising diligence and utilizing rewards effectively, you position your business for sustained financial health and success.

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CEOWORLD magazine - Latest - Banking and Finance - The Dos and Don’ts of Corporate Credit Card Usage for Startups
Despina Wilson
I am a senior editor and data journalist at CEOWORLD magazine. My job involves using infographics to report on news topics related to business and policy, with a global perspective. I hold a master's degree in journalism and have worked for newspapers and reporting projects in both the US and the UK, giving me a unique transatlantic perspective. I believe that data can enhance coverage of all news topics. As a contributor, I plan cover a wide range of issues, such as gender equality, climate change, labor, and immigration, using relevant statistics and insightful visualizations.

Email: despina@ceoworld.biz