If your small business is weighing whether or not to give out employee credit cards, you may have questions as to whether doing so will lead to more responsible spending.

Managing and analyzing cash flow is one of the biggest challenges that small businesses face. That task gets even more complicated when it comes to covering the expenses that employees incur over the course of business trips, when buying supplies for the office, and other day-to-day charges.

Every meal, trip, and additional platform subscription that your employees purchase—with permission, of course—adds up. And without a holistic, transparent view of your spending, you might not know it’s out of control until you’re already in the red.

Giving employee credit cards to responsible employees is one tactic businesses use to track company spending. It’s an approach that comes with both pros and cons. Let’s examine them both and you can decide if the drawbacks are worth the benefits.

The pros of giving out employee credit cards

Let’s say you find a business credit card or corporate card program that you feel works for your small business, and want to give certain employees their own cards on the account as well. Here are the pros:

Creates benefits for the business in the form of rewards

Business credit cards, unlike business checking accounts, typically come with rewards and perks—such as cash back, airline points, hotel upgrades, and more. As employees use their cards, rewards are accrued on the company account.

Businesses then have two options: They can let employees retain and use those perks as they see fit, or dole out the perks to employees at their discretion. Either way, businesses passively earn these rewards for expenses they would have to cover anyway—and can use them to boost employee morale and loyalty.

Avoid a lengthy reimbursement process

Without a company card, employees that make purchases on behalf of the business then have to collect receipts, submit them to human resources (or the business owner) and wait to be reimbursed. That process forces employees to engage in menial tasks, slowing down their productivity and potentially affecting their happiness with the company if reimbursement takes too long.

No more putting large purchases on personal credit cards

In general, business and personal expenses should remain separate. Not only does this make reporting for tax season much easier, but it doesn’t put an undue and potentially untenable burden on employees to “front” the business money, especially on large purchases.

Asking an employee to buy plane tickets on their card, and perhaps accrue interest charges and hits to their credit while they wait for you to pay them back, puts them in a difficult situation. Say no and they’re not a team player; say yes and they’re tying up their personal finances in a way they may not be able to afford. Avoid this conundrum altogether with a company card.

No more sharing a single card

If you have a single company card that is shared across the company, you’ve probably experienced at least one of the following problems: multiple people needing the card at the same time, having no idea where your card is, losing the card altogether.

Rather than passing a single card around among your team, give out individual virtual credit cards, or print physical copies that each party will be responsible for. It will be more efficient and less frustrating.

Decreased fraud opportunities

Although you should trust your employees not to submit fraudulent purchases, it’s always good to eliminate the opportunities to do so when you can. With a business credit card, there is a record of every purchase an employee makes, and each transaction can be reviewed and disputed if necessary.

credit card

The cons of giving out employee credit cards

Company credit cards are not the perfect cash flow management tactic, of course. There are drawbacks to the practice, which should be weighed against the benefits:

Possible issues controlling spending

Giving an employee a credit card can sometimes lead them to thinking they have carte blanche to use it as they please. Unless very clear guidelines are laid out for how to use a company card, you might find employee spending to be above what is sustainable—especially in the first few months.

Business credit cards tend to have higher spending limits than personal cards, so oversight on what qualifies as business spending needs to be closely monitored. According to JPMorgan Chase, more and more companies are offering training to business travelers and their supervisors to avoid such issues.

More credit cards means more possibilities for theft

The more copies of credit cards available, the more possibilities there are for a card to get left behind somewhere, stolen, or otherwise used fraudulently. Even if you trust your employees, they can’t help it if their wallet is stolen and their company card is used to make expensive purchases. While you can always fight fraudulent charges, your cash flow might suffer in the meantime.

Potential pushback if rewards aren’t returned to the employees

If an employee racks up tons of travel rewards points with use the company credit card—but does so because they’re on the road, flying or driving around the country to help advance the business—they should probably be compensated with the kinds of upgrades you get from a business credit card. If you fail to share in the benefits of the card, prepare for employees to pushback, feel alienated, or leave the company altogether.

Additional cardholder fees

Some credit card companies charge fees to add additional cardholders to an account. It may feel like an unnecessary expense to you to pay for your employees to carry around another credit card, especially if it isn’t used frequently.


The days of asking employees to fill out the dreaded expense report, or handing them some uncounted wad of cash to cover “incidentals” while on the road, are over. An employee credit card is an easy solution to the issue of managing and controlling spending—but it does require additional oversight and precautions of its own.

An employee credit card doesn’t mean no issues or risks, just different ones. It’s up to you to decide if those responsibilities are worth the conveniences to your small business.

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