Pros and Cons of Getting a Corporate Credit Card

Pros and Cons of Getting a Corporate Credit Card A corporate card sounds like a great perk, but dontforget the fine print.Most importantly, you need to clarify whether youre being offered a corporate card or a geschftsleben leistungspunkt card. They may sound like the same thing, but theyre actually a little different. One key distinction Where business credit cards are concerned, employees are personally responsible if the company fails to make good on the payments not so with corporate cards.Corporate credit cards are a breed all their own. They come with some pretty nice benefits, but also a few drawbacks that are worth your attention. Consider these pros and cons before going all in.Pros of a Corporate Card1. Your Personal Credit Is Out of the MixWhen you receive a corporate credit card, the monthly billgoes directly to your employer. Your corporate card activity isnt reflected on your personal credit report because your companytakes full responsi bility for any expenses you charge. Your only responsibility is to use your corporate card in accordance with your companys policies. (Put another way Keep all personal expenses off this card.)Keeping work-related expenses away from your personal credit history has some other benefits as well. If you were to use a personal card, work charges would increase your credit utilization ratio (a.k.a., the amount of available credit youre currently using). This ratio makes up 30 percent of your FICO Score. Translation Carrying work debt from month to month could bring down your credit score.2. You Dont Have to Wait for ReimbursementsTheres definitely a convenience factor to having a corporate credit card. Using a personal credit card to pay for business expenses means waiting for your employer to pay you back.If you are flush with cash and can just pay it off and afford to wait for your reimbursement to come in, thats not going to be too much of an issue, says Beverly Harzog,credit card exp ert and consumer finance analyst for US News World Report. If youre a person who lives paycheck to paycheck, waiting for that reimbursement can get a little dicey for you.3. The Card Isnt a Concern When You Exit the CompanyWhen the time comes for you to leave your company, your employer will cancel your corporate card. This wont affect your credit, since activity on the card doesnt show up on your credit report.However, if you were granted a business card which is connected to your personal credit history closing down that line of credit would reduce your available credit limit and increase your credit utilization ratio. As a result, your credit score could fall.Cons of a Corporate Card1. You Wont Reap Any Credit Card RewardsUnfortunately, you probably wont be able to cash in on any rewards you accumulate with your corporate credit card.Many people want to use their own cards because they can earn rewards, Harzog says. With a corporate card, those rewards points just get funneled back to your employer instead.Some companies might make some sort of arrangement or exception, she adds. But, in general, you should not expect to be getting those rewards if youre using a corporate card.In other words Dontplan to cover your next vacations airfare with miles accumulated from your businesspurchases.2. You May Feel Pressured to Use It Even When You ShouldntHaving a corporate credit card in your wallet does not give you license to whip it out whenever you want. Every company has its own set of guidelines around employee spending, and straying from them could put you in hot water.Youre held accountable for your expenses, even if youre not filling out an expense report, says Harzog. If you cant justify your expenses, its going to make you look bad and could put your job at risk, so practice setting boundaries.Corporate credit cards are nice in that they keep your work expenses separatefrom your personal spendingand leaveyour credit score intact. The major downside is y oull miss out on earning rewards. At the end of the day, only you can decide whether thats a worthwhile trade.Marianne Hayes is a longtime freelance writer and content marketing specialist.