When making purchases for your company, a corporate credit card is a valuable tool. Before you get one, however, there are several factors to consider.

1. Business Credit and Corporate Credit

There is a difference between corporate and business credit cards, although the terms are sometimes used interchangeably in casual conversation. Corporate cards are issued to C corporations, S corporations and LLCs and have annual revenue requirements; for example, a corporate American Express credit card requires annual revenue of $4 million.

If you are a sole proprietor or freelancer, you are not eligible for a corporate card, but you can apply for a business credit card. In either case, you must have a good business credit score. This is different from your personal credit score.

If your business is relatively new, you may not have built up a solid business credit score, even if your personal credit is good. In this case, you can apply for a secured credit card, which requires a cash deposit as collateral. A secured business credit card will help you build your business credit score.

2. Rewards

Many corporate cards offer rewards, which can offset some of your business expenses. For example, if you or your employees frequently travel for work, look for cards that offer airline miles. You may also choose to use cashback rewards on gift cards and other perks for employees.

3. Special Promotions

Some cards offer low introductory interest rates or special financing options on large purchases. If your business is relatively new and operating on a tight budget, these special offers can help your business grow.

4. Employee Cards

When contemplating your options, consider whether your employees will need their own cards for business expenses. Bear in mind that some card issuers charge a fee for multiple cards, although some offer them at no extra cost. You should also consider what security features are offered, such as spending limits.

5. Tracking and Reporting

Corporate credit cards make it easy to track business expenses. Many issuers provide advanced tracking and analytical tools to help you keep track of where money is being spent. These are especially useful if you have many employees making corporate purchases. When considering opening an account, review the tools and resources offered to make sure they will work for your company.

6. Liability

Corporate credit cards offer three liability options to determine who is responsible for the debt. If you plan to issue cards to employees, you should consider these options carefully.

The first and most common option is corporate liability. The corporation assumes all liability for the debt, and the bill is sent directly to the company. Employees do not need credit approval to use the corporate card.

The second option is individual liability. The employee receives the bill and makes the payment, then requests reimbursement from the company. This can help discourage unauthorized purchases. However, it requires the employee to receive credit approval.

The third option is joint liability. Both the employee and the company are liable for the debt. This means the card issuer can pursue either the company or the employee for an unpaid balance, and past due balances may appear on the employee's personal credit report.

7. Fraud Protection

Under the CARD Act of 2009, certain protections are mandatory for personal credit cards, including fraud protection. However, the laws that protect consumers do not apply to business accounts. While most corporate cards offer fraud protection, you should review the terms and conditions carefully before applying.

Corporate credit cards are a necessity for most large businesses. Review your options in detail before opening an account to ensure that you choose the best card for your company's needs.