Ali Mercieca is a Finance Writer and Content Editor at Ramp. Prior to Ramp, she worked with Robinhood on the editorial strategy for their financial literacy articles and with Nearside, an online banking platform, overseeing their banking and finance blog. Ali holds a B.A. in Psychology and Philosophy from York University and can be found writing about editorial content strategy and SEO on her Substack.
https://www.linkedin.com/in/ali-mercieca-4443b3121 York University
-p-500.webp)
An employee credit card agreement is a document that clearly outlines the guidelines for using your company’s corporate cards. This includes rules like what types of expenses can be charged to the card and the process for filing expense reports.
Giving your employees corporate cards eliminates the need for reimbursements, but employees are typically still required to track their expenses and keep receipts. Such an agreement states these rules in writing.
Companies put credit card agreements in place to make sure it's clear which business expenses are authorized and which aren't. This helps employees know what they can purchase on their card and avoids the risk of unauthorized spending or overspending.
Additionally, these agreements often detail the procedures for reporting expenses, which is crucial for accurate financial recordkeeping and compliance with tax regulations.
Separate from a company's internal credit card policy is your business credit card's cardholder agreement.
A cardholder agreement is a legal document that outlines the terms and conditions of your credit card account. For your business credit cards, you should read these terms to understand the interest rate and how minimum balances are calculated.
A comprehensive employee credit card agreement should include an overview, eligibility criteria, usage guidelines, reporting procedures, consequences for misuse, and card deactivation steps.
The overview section explains what this agreement is and why it’s required. It should also have the effective date and emphasize that it’s a binding agreement once signed by both the employee and an authorized company representative.
Who is eligible for an employee credit card and what’s the criteria for their approval? Many companies only offer this service to certain departments, like sales or purchasing.
Clarify the eligibility criteria in your credit card agreement so employees know they may no longer be eligible if they leave their department. You might also decide to run a credit check before issuing cards, in which case you should let your employees know in this section.
This is the section where you can define which purchases are allowed on the cards. You can also include spending limits and authorized expense categories, though that’s tough to enforce without expense automation. Be specific here so that there’s no room for misinterpretation.
If you think asking your employees to get receipts for business charges on their personal credit card is difficult, wait until you require it for the employee credit card you give them. Make sure you include a mandatory receipt collection and expense report clause in the agreement. Enforcing it may be difficult, but you’ll need to have it.
What happens if the employee doesn’t follow the rules for using their employee credit card? The usage guidelines can be found in the agreement. The “consequences” section should provide details on what happens if employees don’t follow those rules. The consequences for noncompliance could range anywhere from losing the card to termination of employment.
Employees sometimes leave the company or change departments. Write out card deactivation procedures for these scenarios. This is also a good place to add a “safety and security” section that explains what the employee is responsible for if they lose their card and don’t report it. That requires a card cancellation and a reissue if warranted.
These are the guidelines your employees will follow when using the corporate cards distributed by your company.
Here’s a template you can modify for your own corporate credit card use agreement:
EMPLOYEE CREDIT CARD USE AGREEMENT
This Employee Credit Card Use Agreement (“Agreement”) is between _______________ (“Company”) and _____________________________ _____________________________.
Employee Name (Print) Credit Card Number (exactly as shown on card)
I, the undersigned, acknowledge receipt of the above-listed credit card issued by the Company (“Card”) and affirm my information is accurate. By signing this Agreement, I agree to adhere to the following terms:
Employee Signature: _____________________
Disclaimer: This template is provided as a general guide for informational purposes only. It is not legal advice, nor does it establish any form of attorney-client relationship with Ramp or the creators of this document.
We recommend that you consult with your own legal counsel to review and customize this template for your specific needs and to ensure its compliance with applicable laws and regulations prior to its use.
Your employees may want to know if their corporate credit cards will affect their personal credit scores. In most cases, corporate credit card holders won’t see their personal credit affected. Instead, your business takes on responsibility for the proper use of the cards.
Corporate cards typically require full balance payments monthly, so there’s no possibility of late payments. As a business owner, paying off the balance is your responsibility, so your employees’ credit won’t be affected unless they’re added as primary cardholders.
With Ramp’s charge cards and finance automation tools, issuing employee cards is simple, easy, and secure.
With a Ramp card, all your expenses are tracked. Reimbursements, should you need them, are automated, and you have a real-time dashboard where you can see what and where employees are spending.
Best of all, the receipt collection process is straightforward. Employees can simply snap a photo of their receipts and Ramp will automatically match it to a transaction. If you use our Gmail integration, receipts will be matched automatically with no human touch.
