Should a company provide corporate credit cards to employees or let them use personal credit cards?

If there is a need for people to have credit cards, I would prefer and recommend them to have company cards with all the controls and policies connected to it. Separating (as much as possible) personal and work finances is just good business practice.

Occasionally there is an employee who cannot get a card due to personal reasons and you may need to sponsor a card for that person if you expect that person to travel. But watch it carefully and put strict limits on it.
The company is liable for company credit cards and if they are misused you may be on the hook for the charges. I've had better luck with employees using their own cards and then managing the expenses via the travel policy.

A corporate card program has costs and risks, but can be a powerful tool for spending control, especially in the T&E space (think of what can be purchased, and from where). Also, access to that data can be a great asset in trying to improve your bargaining power with travel vendors (knowing $s spent on hotels, car rentals, etc.), and can aid your efforts to push compliance / reliance on approved vendors. Finally, linking the card data directly into your T&E reimbursement system can provide a great deal of efficiency gains.

Personal whenever possible. Submitting receipts same as for any other expense. Every company I have ever been with who gave our company cards there was at least one case of theft or fraudulent use. Many more incidences of very questionable use of the card, and borderline expense calls. Most misuse coming from those whose personal credit is also the worst. The "convenience" factor is more than out weighed by loss of control. Have you ever tried to get back money from a former employee who misused a card? Legal sink hole and likely write off.

It's got pros and cons. One benefit not mentioned above is the corporation picks up the " points " from the employee business spend that would have been on their personal cards. This can be substantial. Some companies share the points with the employees; others don't. You would have to decide.

1. We have a corporate program with American Express where any employee who incurs travel expenses in excess of $5K annually is required to obtain an AMEX card on the company account. Employee's cannot earn points on their Corporate AMEX card - we have a relationship with AMEX where the company earns an annual rebate.
2. The employee is still responsible for submitting an expense report and paying their own AMEX statement/bill each month.
3. Airfare is covered by a blanket AMEX card through our travel partner, BCD travel.
4. We have a manager over the AMEX program that monitors past due balances or statements that are not being paid. This information is also verified through HR prior to an employee's last day with the company to make sure we are not on the hook for any substantial expenses sitting on their statements.

There is a split among CFOs on this but I would say the majority I have spoken to do not like company credit cards where the bill is paid directly by the company because it creates more work for the Finance department. Often we have seen these types of cards precede the CFO into the company and the cardholders (often the CEO and other executives) are "grandfathered" so they are allowed to keep them but new employees do not get them.

The primary problem is that employees have no "skin in the game" to really watch what they spend and then to provide the necessary data in expense reports (i.e. receipts and other info to code into the GL). And reconciling the monthly statement often forces Finance to track down that info. We have had good success helping customers automate this to provide much better efficiency and control for Finance.

Also, it should be noted that expenses from corporate credit cards are still subject to the IRS receipt requirements - the credit card statement is not adequate for audit purposes.

A corporate card is a privilege. For heavy travelers it is a convenience, and makes record keeping easy. We have an account where the employee is personally liable for the timely payment of the card. They must submit their T&E reports in a timely fashion to the company for approval and payment.

The company should never assume the credit liability, either solely or jointly. That is an issue, i.e. a problem waiting to happen. If an employee that needs a card does not pass the credit requirements of Amex or the banks, they should not pass your requirements.

I disagree with Regis (and some posters?) on this one....Credit cards are no longer a "privilege" (may not even be a "convenience"). It is a necessity for some people in the company and for some transactions. Yes, that includes even executives. Commerce has gone a long way since the olden days of my dad's "Diner's Club". More importantly, the speed of transactions nowadays necessitate having credit cards.

I will post these questions, what are the alternatives? Issue out cash? Wait for purchasing department for needed things? Wait for checks to be issued? How about those frequent travelers that needs re-bookings and transfers and meals (out in an airport somewhere)? etc.

I still am in the position that if a company expects employees not to use company resources for personal use, the company should also reciprocate by not expecting the employee to use his credit resources (line) for company use. The company should be able to provide the resources to the employee to do his job efficiently/effectively. Separating (as much as possible) personal and work finances is just good business practice. Even if the employee volunteers his credit (card) , I would still prefer that he hold a company card. It just takes off potential problems (like ownership of bonus points) down the road. Potential company liability? An employee can expose the company to other greater liabilities than a few thousand dollars in credit limit. But that is another discussion altogether.

Of course this does not mean just issuing out the credit cards. Controls and policies needs to be in place. Credit limits, T&E reports submissions, etc.

BTW. If there are "credit" concerns, there are other financial products available in the market. Prepaid cards for example. The employee can just call someone in the company and have them transfer the needed amount to his "company prepaid card" to keep the balance at a minimum acceptable exposure.

"I still am in the position that if a company expects employees not to use company resources for personal use, the company should also reciprocate by not expecting the employee to use his credit resources (line) for company use. The company should be able to provide the resources to the employee to do his job efficiently/effectively. "

I have the same position for laptops, cell phones and company cars or for any item that may have dual use.

Reading all the responses, I ask this......If fraud and abuse is the primary concern, is credit card issuance (use and policies) really the core problem? I posit that it is a bigger culture and hiring problem that just manifests in credit card fraud and abuse. Clamping down on legit use of credit cards will NOT solve the problem . It will still leave you with untrustworthy non-policy abiding employees and limit the effectiveness and motivation of good ones.

I actually do not think fraud is the primary concern for most but it can be a concern for some (if it is primary, I suggest you consider moving to a flat per diem). The more common issue is additional info Finance needs - and tax is a part of that. But in both cases, automation with the right solution should greatly improve the experience for Finance and employees.

The scenario I do see with many SMBs is where some corporate cards pre-date the CFO because the CEO got them to make it easy for him/her, early execs, and certain departments. Those cards are often "grandfathered" and then still need to be managed, often separately from the rest of the expense reporting process. That is something we have focused on with great results.

I tend to agree with Anonymous that use of personal cards can help foster a culture where employees give more thought to what they are spending on behalf of the company. But having or not having a card program does not dictate the environment - so just decide what is more important to you and that should help make the decision. Happy to help.