Corporate card comparison for Australian businesses

Search for ‘corporate cards' on Google and you'll find hundreds of different cards pop up. Business credit cards, corporate charge cards, expense cards, travel cards, prepaid cards, virtual cards - how do you tell the difference and decide which card is right for your business? 

The good news is that once you break it down there are actually 3 major card types available:

1. Debit Cards
2. Credit Cards
3. Prepaid Cards

In this blog post, we’ll help you understand the pros and cons of each corporate card.

Corporate Debit Cards

When a transaction is made with a debit card, funds are deducted from the available balance of the company bank account and paid to the merchant.

Pros

• Cards draw from your company bank account at the time of transaction which means that money is available for other payments
• Some debit cards have access to an overdraft facility

Cons

• If a card is lost, or irresponsible spending occurs, all of the money in your company bank account is at risk
• Financial checks and paperwork are required to qualify
• No access to a line of credit

Best suited for: Medium-sized businesses that want a small number of staff members to have cards.

Corporate Credit Cards

When a transaction is made with a credit card, funds are borrowed from the card provider (up to an approved credit limit) and paid to the merchant. These borrowed funds must be paid back by a specific date or interest will be charged on the outstanding balance.

Pros:

• Credit can help you manage business cash flow
• Most credit card issuers provide rewards or are linked to a points program

Cons:

• Credit card fees and interest repayments can be expensive
• Managing credit repayments requires time and resources
• Extensive application process with credit checks, personal guarantees and paperwork are required to qualify for a credit card (which can affect the personal credit scores of company directors)

Best suited for: Businesses that want to manage cash flow better and have the resources to manage credit repayments.

Corporate credit card vs business credit cards 

Corporate credit cards generally have more controls and spending limits in place than business credit cards. Corporate credit cards are designed for bigger businesses and may have higher fees. They might also be linked to an expense management system, giving the Finance team more visibility into business expenses. 

Note that this is typically a definition that's used more strictly outside of Australia. They are used more interchangeably in Australia. 

Corporate Debit Cards

When a transaction is made with a corporate debit card, funds are deducted from the funds available in your account and paid to the merchant. You cannot spend more than the funds in your account balance.

Pros:

• No credit or financial checks are required to qualify 
• Staff can only spend the funds available in the account
• If a card is lost or frauded, then your exposure is limited to what is available in the account

Cons:

• No access to a line of credit
• Adding and withdrawing funds from cards requires admin or software to manage
• Not all merchants or vendors accept prepaid cards

Best suited for: SMEs, startups with limited credit history and NFPs that want to quickly issue cards to lots of staff members whilst staying in control of spending.

Virtual Corporate Debit Card

Virtual corporate debit cards are very similar to physical cards but exist in a smartphone's virtual wallet. They can be distributed to staff members much quicker than a physical card and also be easily locked or removed. 

Find out more about what a virtual card is.

If you're interested in a simple, all-in-one card solution it might be worth looking at Weel. With Weel you can instantly issue virtual corporate debit cards, control spending and automate expense reporting from one central account allowing for a quick statement reconciliation.

We've also written separate guides on how Virtual Corporate Debit Cards are different to credit cards.