Getting a Virtual Credit Card: A Detailed Guide for Business Owners

Virtual corporate cards offer various benefits. Having one helps build business credit, mitigate cash flow issues, and delegate spending to employees. In addition, the cards come with exciting rewards.

But how do you apply for a virtual corporate card? Read on to learn the step-by-step process of getting a virtual credit card and its benefits.

4 Business Benefits of Having a Virtual Credit Card

Having a virtual credit card has advantages, especially for business owners. Here are some of them.

1. Streamlined employee spending 

Traditionally, employees file reimbursement claims for business expenses manually. Nowadays, a virtual corporate card makes it easier and faster to conduct the process, thanks to automation. 

Managers also have better control over employee spending since most cards, like Spenmo's virtual corporate cards, include a merchant lock feature that helps limit business expenses. 

2. Improved protection against fraud 

Using a virtual corporate card can significantly prevent expense fraud since managers can control how and where the employees can use the card. For example, card use may apply to specific merchants only. Employees cannot use the company's credit line with non-authorised stores or companies. 

The card can also automatically detect fraudulent activity against your organisation's parameters. In addition, managers can assign pre-approved funds and freeze the account with just one click to prevent overspending.

3. Reduced transaction costs

Virtual corporate cards typically offer cash rebates and other rewards like physical cards. But here's the catch: virtual corporate cards charge relatively cheaper rates for online transactions. For instance, Spenmo offers minimal fees on foreign currency transactions.

4. Helps manage and track company expenses

Virtual corporate cards provide clearer spending visibility than physical cards, making expense tracking and management more effortless. Managers can monitor and process approvals in real-time. Meanwhile, employees can access funds anywhere at any time.

5 Steps to Get a Virtual Credit Card for Business Owners

Virtual credit cards are easy to acquire. Here are the steps on how to get a virtual credit card.

1. Determine your eligibility

Issuers usually check your business credit score when checking your eligibility for a virtual credit card– where important information like your company's annual revenue plays a significant role. 

Issuers typically use this information to determine your credit limit and the interest rate applicable to your card. They may also consider your annual income as the business owner in case of insufficient revenues from your company.

Some issuers approve applications with a fair or average credit score. Others demand a good or excellent credit standing.

2. Research your options and compare offers

Several corporate credit cards are available in the market. Identify your company needs and examine your business expenses to determine which card type suits your organisation. Then, research corporate credit cards whose features align with your requirements. 

For instance, you could choose a virtual credit card that provides lengthy 0% introductory periods for your growing business. Other cards have reward miles ideal for companies with personnel who travel frequently. 

Remember to check the annual and interest fees, foreign transaction rates, and other charges that can be incurred with your prospective card.

3. Prepare the needed information and apply

Gather the required information and application documents for submission to the credit card company. A typical virtual card application includes the following:

• Business's legal name, structure, and industry type
• Mailing address and phone number
• Number of employees
• Annual business revenue or owner's annual income
• Owner's tax ID or social security number 
• Estimated monthly spending on the card

Your business partner's personal information may also be necessary if you operate under a partnership. Likewise, be ready to evaluate your business financials and personal credit history. Any bankruptcies, tax liens, and collections may disqualify you or cause your application's denial.

The issuer will review the submitted documents and inform you if a follow-up call or email is necessary for other requirements or concerns.

4. Wait for approval

Virtual credit card applications usually take only a few minutes to process. However, applications with additional requirements may take a day or two. Keep your lines open to receive updates about your application. 

Meanwhile, you can review the reason for the denial in case of declined applications. Work on the necessary solutions to improve your chance of getting a card in the future. 

5. Activate your virtual credit card and use it responsibly

You will receive an email containing essential details—your credit limit, interest rate, due dates, fees, and rewards mechanics, among others—upon the approval of your virtual corporate credit card. You will also get a notification when you can start using the card. Establish a system for corporate card spending within your organisation to ensure its responsible use.

Maximising the Advantages of Virtual Corporate Cards

Applying for a virtual corporate credit card is simple, easy, and beneficial, especially if you have the met the requirements and eligibility qualifications.

Spenmo's corporate virtual cards allow you to manage your business expenses at your fingertips. The cards operate just like debit cards and provide employee spending visibility. CFOs and finance managers can also set a merchant lock to limit card use and avoid overspending. 

You can also assign pre-approved funds to keep your business within the budget. What’s more, you can apply for an account in as fast as 30 minutes! Talk to us to learn more about Spenmo's corporate cards.

*Disclaimer: This article is for general education purposes only. Spenmo does not make any representation, assurance, or warranty, express or implied, as to its services or products offered in this article. For the avoidance of doubt, Spenmo does not purport to issue any credit cards and issues only business corporate cards, which function as debit cards.