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How Corporate Credit Cards Work
Author:  PharmaVet
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Corporate credit cards are a topic of great interest to prospective pharmaceutical sales representatives. Many are dismayed to learn that a personal credit check is part of the hiring process. Companies in most industries now run credit checks on all prospective hires. Originally this was to make sure that employees who handle the company's or its customers' money or accounts, or who have the authority to incur debts in the company's name, have a clean financial history. The practice has now extended to include employees who may not have any financial authority on the company's behalf. The reason generally given by employers is that if the employee lacks the responsibility to take proper care of his or her own finances, he or she probably lacks the general responsibility that the company looks for in its employees.

How do corporate credit cards work?

Your company will have a corporate card program, almost always through American Express. The company requires that you apply for the card, but it's YOUR credit-worthiness that is considered when the credit application is processed. Essentially, it's as though you're applying for a personal credit card -- YOU are responsible for paying the bill. You'll use the card to make purchases on behalf of your employer with the understanding that they will reimburse you for those purchases. But know this -- it's YOUR credit on the line. If you don't pay the bill on time because they haven't reimbursed you yet, YOUR credit record gets dinged.

Some companies tie their expense reporting and reimbursement systems directly to AmEx. In these cases, you incur the expenses, complete your expense report online, and submit it. The company sends payment directly to AmEx on your behalf. The key phrase here is 'on your behalf'. If your company makes the payment late, that's unfortunate...but it's still your account, your credit, and your responsibility. Look at the legal relationships between the parties. You have a legal agreement with AmEx that you will make sure they are paid on time. Your employer does not. If they're not paid on time for any reason (your company, the mail, whatever), you're the one with the legal responsibility for it.

If it's a corporate credit card, why isn't the company responsible?

Employers almost never bear the legal responsibility for the bill because they don't want to get stuck paying for purchases unrelated to their business. Let's say you completely lose your mind and use the corporate AmEx to buy yourself jewelry or pay for vacation travel, despite the fact that you must agree up front that you won't use the corporate card for personal purchases. The airline or jewelry store isn't responsible for making sure your purchase is business-related. You are. Merchants would no longer accept AmEx as payment if AmEx tried to impose that responsibility on them. So if the employer had assumed the responsibility for the account, legally they'd be on the hook for your personal purchases. Their only recourse would be to fire you and sue you for the amount you charged on personal purchases. But that's not practical, because they could easily pay more in legal fees than they'd recover in court. Also, it's hard to get money out of an unemployed person, particularly one who's short enough on ethics that they'd run up personal charges on a corporate account.

So the way around this dilemma is to make the employee bear the legal responsibility for the account.

Think about it...if you're responsible for paying the bill, you'll be far less likely to make unauthorized charges, won't you? And, very importantly, you'll be far more likely to do your expense report promptly so you can get reimbursed. If the company was responsible for paying the bill, you might not be as motivated to get your expense report turned in on time. And if that sounds like it's no big deal, consider this hypothetical that illustrates the potential impact on a company:

WonderDrug Pharmaceuticals has 20,000 sales reps who each run up a modest monthly AmEx bill of $1,000. The company pays the $20 million total monthly AmEx bill directly because they are the rare employer who assumes legal responsibility for the accounts. Those 20,000 happy pharma reps don't have to pay the bill themselves, but the company still expects them to submit their receipts and appropriate explanations of the business purpose for each expense. However, those 20,000 reps don't have much motivation to comply. Sure, they know their annual reviews could suffer if they don't get it done on time. But they have a lot of paperwork and computer work to do, and although they know it's part of their evaluations, they still put it off. Now the fiscal year has ended and the IRS decides to audit WonderDrug Pharmaceuticals' books. If every single one of the 20,000 sales reps failed to submit expense reports every month for a year, WonderDrug would be unable to account for $240 million in business expenses. The tax implications for WonderDrug would be overwhelming and their stock price and market valuation would suffer. They could, of course, fire the sales reps...but in this scenario, every single sales rep broke the rules. It's not feasible to fire them all.

What if my application for a corporate credit card is denied?

If you get hired but are unable to get approved for a corporate credit card, some companies don't care as long as you have another credit card of your own that you can use. Other companies, however, may consider your inability to get a corporate credit card a deal-breaker. For the most part, these are probably companies that have their expense reporting and reimbursement system tied directly to AmEx. However, even some of those companies will give you the ability on your expense report to disable the feature that triggers the company's automatic payment to AmEx on your behalf. In that case, you submit your expense report, pay the credit card bill and wait for your company to reimburse you, either by paper check or electronically.

But if they checked my credit before hiring me, how could I be turned down for a corporate credit card?

There are different standards used for credit checks depending on the purpose for which the credit check was run. A credit history good enough to get you hired or to get your utilities turned on may not be good enough to get you a credit card or a mortgage. And you really can't tell just by your FICO score whether you will be approved...all you can do is keep your credit record as clean as possible, apply for the job, apply for the corporate credit card after you're hired, and hope for the best.

My credit score isn't so good. How can I improve it before getting into the industry?

Many people, including some who would probably surprise you, have lousy credit. Don't give up, though...there are some things you can do to improve your credit score:

  • Pay every bill on time, every time. Even one late payment will cause your FICO score to go down.
  • Always make more than minimum payments. If the minimum payment on your Visa bill is $40, pay $45. Making minimum payments will cause your FICO score to go down.
  • If you absolutely can't pay all your bills, at least pay the creditors who report your payment history to credit reporting agencies.
  • Pay off as many debts as possible and then leave those accounts alone. Don't charge anything on them unless you have absolutely no choice.


These are just a few basic steps you can take if your credit score needs work. A financial expert will be able to help you determine the best course of action based on your own unique financial situation.

 
 
  Author: Anonymous Medzilla Reader
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   I have settled all my credit cards after they became defaulted, and now my company want to give a corporate card, do i need to have a good credit to be able to get the corporate card.
 
 
 
  Author: Wasn''tThinking CLearly
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   I made the worst decision in mid December regarding my corp AMEX bill payment. I received payment for my bill from my employer via EFT and I did not recognize soon enough that this payment is to pay my AMEX bill. I spent the payment on bills not AMEX bills. I intend to pay the AMEX bill in full by April 2013, any advice? Does AMEX communicate with the employer regarding an employee's credit card?
 
 
 
  Author: Manufacturing Engineer
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   My company has a travel policy that "requires" we have a Corporate AMEX card. I agree with every thing said in your post. That the employee is responsible for the bill and its the employee's credit score at risk. What this amounts to is that my employer is requiring that employees give the company a "line of credit". THE BIG QUESTION that I need answered is can a company legally require the employee to give it a "line of credit. I have a personal credit card that pays me back. Since I am providing a line of credit to the company and I could be on the hook for the bill if they didn't pay, then I feel that I should benefit for my risk. In the manufacturing industry it's typical for our vendors to add 7 - 10 percent for balances on a line of credit. Why shoud this be any different. So does anyone know. Is it legal to require employees to provide a line of credit?
 
 
 
  Author: Need help Fast
 
    PharmaVet Please help How Corporate Credit Cards Work   Log In to Report Post
 
   Hi PharmaVet!

Please look at my 8-26-07 9:35am log under "how Corporate Credit Cards Work. Please anyone with experience have advice on that situation. I would appreciate any feedback!!!
 
 
 
  Author: Need Help Fast---Please!!!!!!
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   I have been in the Pharma Industry 5+ yrs. Up until now, my credit has been ok. It is now at it's lowest and I am seeking for jobs. Does anyone know what companies allow bad credit and which don't??? It would be very helpful so I don't waste my time nor the company's time through the process only to get turned down because of credit. Also, I know I have to go with a company that provides company cars as I can't buy a new car for a company that does "car allowance's" I was told it will take me 18 month to repair my credit(through no fault of my own) I was dumb and because I had money and credit, but things in my name for my boyfriend and got royally screwed in the end. My previous company was downsized as they drug never got approved and now I have to find a new company with my credit from "HELL" Please Help!!!!!!!!!
 
 
 
  Author: Anonymous Medzilla Reader
 
    Tap Pharmaceuticals   Log In to Report Post
 
   Does anyone have any information on the company...training, benefits etc? Awaiting the next step in the interview process.
 
 
 
  Author: Anonymous Medzilla Reader
 
    Re: PFIZER TRAINING   Log In to Report Post
 
   DOES ANYONE KNOW HOW LONG PFIZER TRAINING IS? DO THEY HAVE HOME STUDY AND FOR HOW LONG? WHERE IS TRAINING? THANKS
 
 
 
  Author: Susanne
 
    looking for a scientist position in biopharma - therapeutic area   Log In to Report Post
 
   Hi, I am a postdoctoral associate at Yale University at the moment and planning the transition from Academia to Industry for this year. I have a PhD in Molecular Oncology/Cell Biology and 7 years of lab experience (protein biochemistry, cell biology and molecular biology). Relocation is not a problem. However, I am looking for a company that is willing to sponsor my green card application or to transfer my H1B Visa. Any information or experience you would like to share with me? Thanks.
 
 
 
  Author: anonymous
 
    BioTech Oncology MI   Log In to Report Post
 
   Does anyone know the BioTech Oncology position open in MI. Elite Search will not respond and I'm not impressed with the headhunter?
 
 
 
  Author: Jessica
 
    Wisconsin Recruiters   Log In to Report Post
 
   Does anyone know of any good Wisconsin Medical Recruiters or curretn Medical sales positons in Milwaukee or Madison?
 
 
 
  Author: Anonymous Medzilla Reader
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   I'm currently involved in the hiring process with AstraZeneca and concerned that my SUPER low FICO score will screw everything up.

Anyone been in this situation? Do they have any contingency for those of us trying to clean up our bad credit?
 
 
 
  Author: Anonymous Medzilla Reader
 
    Re: Blog Idea   Log In to Report Post
 
   Recently hired by AstraZeneca, and had to fill-out an AMEX application for a company card... I have always been turned down by AMEX in the past. My FICO is around 670 with Experian...does anyone know what AZ's policy is ? I passed my background check, so I assume getting approved for an AMEX is NOT a deal breaker.
Couldn't I just use my own personal CC as an alternative IF I get turned down for the AMEX ? Guess it depends on company policy....
 
 
 
  Author: Former Sales Manager
 
    Blog Idea   Log In to Report Post
 
   How about something on background checks, specifically references?

I think it would help for people to understand about what is company policy or generally accepted policy in a reference check, versus what is the actual law. So many of these people think that they're covered by some sort of legal statute that says the prior employer can only give X, Y, and Z, when that isn't true.

Then they want to carry on about slander and libel and defamation, etc. if the company does give out information. However, that too usually only applies if the information given was false.

I know this might be a difficult topic as specific libel/slander/employment laws vary from state to state, but I also know there are no Federal Laws that govern this like they do many other HR policies, like EEOC issues, non-discrimination, disability, veteran's rights, etc.

So many of these people think that it's no big deal why they left the company, that their records are "sealed" so to speak, and no employer will ever be privy to any information on their previous position, or that they can just go around suing anyone who gives more than their dates of hire.

If many would stop to think a minute, they would realize how silly it is presume that the "law" says a former employer can only give a positive reference, or write a nice letter, but there are prohibitions against doing the opposite.

Just a subject that gets my goat!
 
 
 
  Author: over 40 too
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   Question, my phone bill was late, and I transposed 79.10 to 71.90, since the bill was to go to DEN and there was a snow storm it was two days late...my understanding that the only utility bill is the gas bill reported to the credit reporting adgencies
 
 
 
  Author: Anonymous Medzilla Reader
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   What about Ameri Path ASR position, will you have to have good credit with this company to get this position.
 
 
 
  Author: Anonymous Medzilla Reader
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   As a Retired GSK Hospital Rep- I think this downsizing is long overdue. The times they are a changing and the U.S.A will not be able to support high pharmaceutical prices with the coming baby boom generation. The Pharmaceutical companies are fat with cash they have made in the United States not in the rest of the world. Small sales forces will be all that is required as prices are negotiated at the State and national levels. If you make the formulary you win.If you don't you loose. A large army of sales people will not be needed. Look at the oversee's salesforce sizes and that will tell you where the U.S.A. is headed.
 
 
 
  Author: Lulu
 
    Re: Getting information about Advanced Bitech   Log In to Report Post
 
   Would like to know is somebody knows anything about Advanced Biotech Company please I need help is this a good solid Company or a Micky Mouse one I do beleive they represent a scar gel. Please Help

Happy New Year to all of you
 
 
 
  Author: raymondpap
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   Does anyone know anything about Scieles credit polices? Do they do a credit check? Do they give you a corp card, can you use your own, etc?
 
 
 
  Author: Steve
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   I spent a number of years in the mortgage industry.So I have probably looked at a million credit reports if I have looked at one. I am not sure if these Pharma companies pull a Tri-Merge( Equifax, Trans-Union & Experian) or just Equifax. In an attempt to repair your credit, never pay a company that asks for money up-front that says they can raise you (Enhanced Beacon Score) by efforts of finding loop-holes in the " Truth and Lending By-Laws." If you have bought a home you know what I mean. Judgments? You are supposed to be served paperwork if a judgment has been filed against you. If you were not, you can file a motion to vacate the judgment based on the fact that you were not served the paperwork. Once the judgment is vacated(ie) rendered invalid, you can send the paperwork to the credit bureaus and they should remove the judgment. Collections? DO NOT CALL THE COLLECTION AGENCIES OR TALK TO THEM ON THE PHONE. There is a way, " debt validation" you can go through to get collections taken care of. Charge-off Accounts? Write a letter to the credit bureaus and dispute the charge-off balance, date the acct. was opened and/or acct. number. In most cases, depending on how old the account is, most creditors will settle for a much lower amount than what is actually owed. Makes sense as interest on unpaid monies is accrued. Finally, you are allowed one free credit report per year. Beware, a number of web-sites offer free credit reports, but they are not free. The best credit or should I say, the highest beacon scores I have seen are credit reports that have no more than 4 tradelines on them. A mortgage, car pymt. 1 credit card and 1 other Revolving acct. Like Home-Depot, Lowes, Sears card. Like the guy who said he made some mistakes when he was younger. I did the same thing. I always used the same card when my Frat brothers and I would go to the bar. Go figure. As a matter of fact I tried to pass the " State Bar", but never could, I always just pulled right in. LOL :)
 
 
 
  Author: Former Sales Manager
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   AMEX Corporate Credit cards are eligible for Membership Rewards at AMEX, which can be used for airline tickets, shopping rewards, etc. (AMEX Small Business Cards are not.)

Most companies allow the reps to keep the points as a personal perk. You may have to pay an annual membership fee out of your own pocket to participate, but if you are running high expenses, it's worth it. If your company allows you to use your corporate card for personal expenses, it gets even better. I would never buy anything on AMEX that I couldn't already afford to buy in cash, but I usually pay for my big-ticket items with AMEX to run up the points - and hold on to my cash for one more month until the bill is due. (This includes paying for new furniture and the down-payment on my last car!)

I bill as many of my recurring expenses as possible to my CC, like my cell phone, internet, etc. It helps build points, and it also ensures that the bills are paid on time.

Lastly, when I travel on business, I pay for every single thing that I can on my credit card - I expend no cash if I can help it. $3.50 for a coffee and roll for breakfast? As long as the merchant allows it, I do it. Why should I float my company a loan of my personal cash?
 
 
 
  Author: Anonymous Medzilla Reader
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   Anyone know what NovoNordisk uses? My credit is really low due to some bad decisions in my younger years.
 
 
 
  Author: Anonymous Medzilla Reader
 
    Re: How Corporate Credit Cards Work   Log In to Report Post
 
   I got approved for a Amx card with Merck right out of college with a Becon score of 530, fico score of 565. My card was not in my name, Merck was responsible for it. If a payment was late it did not show up on my credit reports. The Amx did not show up on my credit report as well. When I took a job Hospital job with Glaxo the AMX was in my name and I was responsible for it. I was approved with a Becon score of 640 and a Fico score 0f 675.
 

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