Some company credit cards show up on your personal credit report, and some don't. However, a card that shows up on your credit report is one for which you are personally responsible to some degree. It's important to understand what responsibilities and risks come with each type of company card. If you pay the card yourself and are reimbursed by your company, you and your company are most likely jointly responsible for that debt. How you use that card can affect your credit score, and any charges the company will not pay become your responsibility.
Company Cards
A company card is not the same as a small business card. Rather a company card is issued by an employer to employees who need to pay for business-related charges, such as plane tickets, hotel rooms, rental cars and office supplies. Some company card debts are paid directly by the company, but others are the responsibility of the employee, who is then reimbursed by the company. This means that the way you use your card affects not only your company's credit, but can either benefit or hurt your credit as well.
Joint Responsibility
Joint responsibility means that the employee is partly responsible for any debt run up on the card. If the company fails to pay it -- for reasons of bankruptcy or because it doesn't approve the charges as business-related expenses -- the employee is held accountable for the charges. A card that shows up on your personal credit report is one for which you are considered responsible, even if the charges are business-related. If the company has sole responsibility, the card should not appear on your report at all.
Risk and Rewards
A joint-responsibility company credit card can be helpful to your credit. Responsible payment by you and your company can improve your credit score the same way that a personal credit card does. However, for it to do so, you must be jointly responsible for the debt. This is a risk, because companies that go bankrupt can leave you holding the bag for a debt that was incurred on the company's behalf. In this case, you'll need to hire a lawyer.
Handling Your Company Card
It is important to know what you're signing up for when it comes to company cards. When a card shows up on your personal credit report, you are most likely responsible for that debt to some degree. The way you use that card will impact your credit. Knowing your company's policies on what expenditures are acceptable can help you avoid making purchases your company won't approve, because purchases that are not approved become your personal responsibility.
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