Things to consider before switching to a corporate credit card

Editor’s note: This is a recurring post, regularly updated with new information and offers.

Small-business credit cards can help you carefully manage your company’s expenses while earning valuable cash back or travel rewards. As your profits and employee headcount increase, you may start to outgrow the cards you originally started with.

Today, we’ll examine what to consider when switching to a corporate credit card.

Be prepared to share financial data

Not all business owners can qualify for a corporate credit card. Issuers may set minimum revenue benchmarks and require that you have an established business credit score, among other specific criteria. You’ll likely have to meet minimum spending or earning requirements that you can prove.

American Express, for example, requires your company to have grossed more than $4 million in the previous fiscal year — and you can’t be classified as a sole proprietorship.

Of course, you’ll have to prove to the issuer that your company meets any required criteria and provide supporting documentation. Amex says to expect to be asked to hand over the following, for instance:

• Recent audited financial statements
• Details on your company’s structure and organization
• Tax information, including a federal tax ID
• Contact information for your company’s authorizing officer

If you’re looking to take the next step in your company’s credit needs but don’t quite meet the thresholds established by the major issuers, you could also look into applying for the Brex Corporate Card. This is designed to be a corporate card for startups, but the company uses innovative technology to improve its underwriting standards and make the card more accessible to companies that are still in the growth stage.

The information for the Brex Corporate Card from Capital One has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Alternatively, you can open the BILL Divvy Corporate Card, which offers unlimited no-annual-fee business cards with decent reward bonus categories.

Limiting personal liability

One big reason to switch to a corporate credit card is to free yourself of any personal liability to repay charges. All small-business card applications require your social security number, and your credit report is used to approve the application. You will also be held personally responsible for guaranteeing any payments.

On the other hand, a corporate card can be set up so that your company is responsible for repaying the debt, rather than you personally. Depending on how much your business is charging to its credit cards, this reason alone might push you to switch to a corporate card sooner rather than later.

Headcount and expense management

Chase says you should start thinking about a corporate account if the number of employee cards you’ve expanded to approaches 100. But if you’re happy with your Ink Business Preferred® Credit Card, for example, you don’t necessarily have to switch to a corporate card just because your business is growing.

You might want to do so, however, because corporate accounts also come with more sophisticated expense management tools than you might otherwise find on small-business card accounts, including software that will allow you to integrate card spending with your general ledger to reduce manual data entry. The BILL Divvy Corporate Card expense management benefit is a perfect example. And, much like with small-business credit cards, you’ll be able to monitor and restrict individual employee spending by category.

Related: Small business credit card vs. corporate credit card: Which is right for your business?

Yes, there are still rewards

Corporate cards still offer rewards and travel benefits, but you may find the programs aren’t quite as lucrative as with small-business cards.

You may also have a higher annual fee for employee cards when you go corporate than you are charged with small-business cards. However, the higher cost does come with more flexibility in how rewards are distributed.

American Express says you can consolidate earned points from multiple corporate cards for company redemptions or allow employees to redeem them individually through the Membership Rewards program. Going that route could serve as an employee incentive and absolve you from having to manage your company’s ever-growing stash of points.

Bottom line

If you’re a business owner and your firm is big enough to qualify for a corporate credit card, it may be worth exploring — if for no other reason than you’ll be able to better protect yourself from liability. That can be a strong incentive on its own.

But you may also be looking for a more robust way to track your employees’ spending. When you have dozens or even hundreds of employees, the tools business credit cards offer may not be appropriate for your needs anymore.