Irrespective of the size of the business, it is essential to keep the personal and professional expenses separate. Business expenses can be huge, and if a business owner is making those expenses on his or her personal cards, there is a significant liability that they are signing up for without realizing the consequences if something goes wrong with the investment. Therefore, to keep things simple and straightforward, the first thing that a business owner should do is to keep personal and professional expenses separate.
What Is the Solution?
The best way to solve the problem related to managing business expenses is to get a corporate card. A corporate credit card can help a business by ensuring the quick availability of funds instantly. It also provides several other privileges which are discussed later in the article. Corporate credit cards gets offered by several banks and credit card companies in Singapore and most of them formulate cards that cater to the specific needs of the SME industry.
Benefits of a Corporate Credit Card
SMEs and Start-ups face unique challenges when it comes to funding and financing. The companies are always on a lookout to find customizable and specialized solutions that can be implemented with minimal effort, to overcome such problems. Corporate credit cards solve precisely this problem by helping the business in alleviating liquidity bottleneck, maintaining operational efficiency, and rewarding in the form of redeemable points. Many cards also carry other benefits like free tickets, travel insurance, medical cover, and low commission on forex cards.
Not only this, but corporate credit cards also help the businesses in keeping the professional transactions in a different account, and skip getting their financial reputation soiled in case of unfortunate events of missed installments.
Types of SME Corporate Cards
Depending upon the benefits that corporate credit cards in Singapore provide, gets divided into the following categories:
- 0% Interest Instalment Plan
These cards offer loans at 0% interest or meager interest rates, providing much room to the start-ups to take a deep breath and re-strategize when the times are bad. These cards usually offer 50 to 60 days of interest-free time, which can go up to 3 years in individual cards.
Cashbacks are rewards in the form of cash given back to the customer when certain spending conditions get met. Cashback cards are gaining popularity due to several sellers willing to provide a cashback discount on the purchase of their goods.
- Travel Cards
These cards gets designed for business owners and their employees who travel a lot for work. The cards usually cover international travel, but can also cover domestic travel. These cards provide miles redemption points, discounts or rebates on international flight bookings, hotel bookings, restaurant bills, and complimentary access to airport lounged. The majority of such cards also include travel insurance.
- Supply Procurement
Some SME specific cards also allow businesses to procure material from B2B platforms at a discounted price. Such cards also tend to add trust to the transaction since they virtually bring the customer and the supplier together. Such cards get used for creating privilege clubs and catering to official events. However, this does not mean that supply procurement cards do not find their application in other areas.
Best Corporate Cards for Businesses
Maybank Business Platinum Mastercard
The Maybank Business Platinum Mastercard is a one-stop solution for companies looking to issue credit cards to their employees with customizable limits. The card allows the business to review and analyze the expenditure on each at the end of the billing cycle and comes with a lot of other benefits that make it the real deal. Also have the facility to print Company Logo on the card.
American Express Singapore Airlines Business Card
The American Express Singapore Airlines Business Card solves the problem by enabling frequent travelers to accumulate points that then exchange them for air miles with any Singapore Airlines Group Flight. Amex does not put any cap or blackouts on the redemption, which makes this a must-have card for businesses that spend a lot of time and money on flight tickets.
Chase Ink Business Preferred Credit Card
The Ink Business Preferred Card by Chase is a simple answer to the companies looking to get a discount on employee expenditure. Every transaction on the card earns the cardholder a specific number of points. These points can redeem in a variety of fashion. The points can get exchanged to get air miles, cashback, or even discounts.
Citi Business Card
The Citi Business Card is the one-stop solution for businesses that are looking for cards with a generous credit limit.
DBS World Business Card
The DBS World Business Card is an all-rounder card with multiple benefits. This card can be used to earn rebates, as well as flyer miles.
How to Choose the Best Corporate Card for Your Business?
Here are the 3 most important things that business owners need to consider before finalizing a corporate card that suits them.
- Rate of Interest and Joining Fees – If the cardholder fails to settle the monthly bill, the card companies usually charge an excessive rate of interest on the pending amount. Therefore, if a business runs into trouble with the money or slow payment cycles very often, the rate of interest can be a significant area of concern. Additionally, some cards charge an unexplainable high annual fee, which should be enough to make a business owner run away from the card.
- Types of Rewards – There are several ways in which a credit card rewards its users. However, not every reward is useful for everyone. For a business that does not require frequent overseas travel, investing in a card that provides a high quantity of air miles is a wastage of money. Instead, such a business should invest in corporate cards that have a trending redemption catalog or provide cashback and cash credit.
- SME specific requirements – Cards that charge a low rate of interest, provide a reasonable interest-free time, waive off joining fee for the first few years, and do not require a minimum spend per annum are the perfect solutions for SMEs.
Once the business has analyzed its requirements on the above parameters, it can go ahead and invest in the card(s) that suit its needs. The five corporate credit cards mentioned above come from banks and companies that have a secure credit card and fraud prevention infrastructure in place. Unlike a business loan, which locks down the business into making interest repayments, a sound credit card comes without collateral, provide flexibility in terms of the amount required by the company every month, low-interest rate and a decent interest-free repayment period.