Corporate cards are a special variety of credit card which a business house issues in the name of some of the employees to give them access to funds which they need to spend while traveling or during out of office business meeting with clients. This is extremely convenient for the employees as they do not need to pay for the business expenses from their own pocket and run to and fro after the concerned personnel in the account department for getting reimbursements.
However, there are also some negative consequences of using the company card as well. Under various circumstances the company credit card can also negatively influence your credit score. Here are some ways by which a corporate card can hurt your credit score.
Liability of the corporate card
The corporate cards are issued on the basis of the credit history of the business house but it does not imply that the employee does not have any sort of liability at all. Thus ideally the company should be responsible for the clearance of the credit card dues and in case of any late payments the issuing company will be held responsible for it. However in many cases it can be seen that the employee is equally liable for the payment of the credit card bills and thus increasing the risk of tarnishing the employee’s credit history. So it is best to knock the accounts department every month to ensure whether the due in your company credit card bills has been cleared or not.
Do not use it for personal expenses
The corporate cards are specifically meant for bearing the cost of the business expenses and nothing more than that. It is extremely important for you to follow the guidelines of the company with regard to the usage of the cards as each and every transactions made with it are checked by the accounts department of the company. Using the corporate card for personal usage can lead to withholding of the credit card bill by the accounts department and thus leading to affecting your credit score.
Worst long term consequence of using of corporate card
Sometimes a single credit card account of the company is being assigned to more than a single individual. In such circumstances it becomes extremely important to keep detailed accounts of every transaction done through it as otherwise you might end up in trouble. Use the latest mobile apps to record the transactions accomplished by you. Moreover, if you leave the organization you should ensure that your name is being taken out from the joint cards account as you might be held responsible for some fraudulent activities in the future by mistake and your credit score will be tampered.
Do not overindulge in a corporate card
It is best to treat the corporate card just as your own personal credit card and thereby indulge in all the frugal steps that you take while using your own credit card. Use the corporate card responsibly as your own credit score is also interlinked with it.
Check the company accounts before using a corporate card
One of the worst mistakes that most employees having access to corporate card make is think that the company can bear any expenses for business purpose. But it is not so in reality. Just as we have to follow a strict budget, even a company has to follow one. Thus check the company accounts before indulging in any frivolous business expense as you might end up in paying it off through as bad loans which is surely going to affect their credit history.
These are some of the worst consequences that you might face if you do not handle the corporate card responsibly and end up creating an undesirable credit score for yourself.
