Center Survey Reveals 70% of Corporate Cardholders Use Personal Cards for Business Expenses

Center, a technology company helping businesses manage and optimise spending, has released the results of its first Business Spender Sentiment Survey, which asked over 500 business spenders—employees who make purchases or travel on behalf of their company—how they feel about using personal cards for work expenses.

“One of the most common statements we hear from CFOs, accounting managers, and HR leaders in organisations of all sizes is, ‘We don’t have a corporate card program because our employees like to use personal cards to earn points, rewards or cashback,’” said Naveen Singh, Center CEO and co-founder. “We wondered if that was actually true, especially given the financial burdens of the pandemic economy.

“What we found is that while employees do see earning points as a benefit, many also experience stress and incur financial costs, especially for the nearly 70% of respondents who carry or sometimes carry a balance on their personal credit cards. Center’s Business Spender Sentiment Survey reveals employees’ burdens, worries, and opinions about using personal cards for work.”

Nearly 70% of corporate cardholders still use personal cards for business expenses. A quarter of them (25%) said they use personal cards because their corporate card isn’t accepted everywhere. 60% of those who choose to use a personal card over a corporate card do so to earn points, rewards or cashback. The employees most likely to make this choice include executives and salespeople, who likely view earning points as a benefit in return for frequent travel.

Nearly 80% of respondents agreed with the statement that “employees want to use personal cards to earn points,” but just 52% agreed that “it’s reasonable for companies to ask employees to use personal cards to pay for business expenses and wait for reimbursement.”

Just under half (49%) of respondents have to use personal cards for work expenses, either because they hadn’t been issued a corporate card or because their company did not have a corporate card program. The majority of this group (56%) said that earning points, rewards, and cashback on their personal cards is a benefit.

Of those who have to use personal cards, half (51%) also said there are burdens that come with using personal cards. These included financial impacts, stress around reimbursement timing, embarrassment when they don’t have enough credit available, and a sense of unfairness that they have to use their own money for business expenses.

Points Come at a Financial Cost, for Employees and Organisations

Survey respondents who carry a balance on their personal cards were of all ages and all levels within an organisation. Even if their companies reimburse them quickly (90% say they are reimbursed in less than three weeks), people who carry a balance forward will immediately begin accruing interest charges on new purchases (business or personal). Those interest charges, which cannot be expensed for work, impact employees’ personal finances and ultimately negate the value of the points earned for those purchases.

Furthermore, for organisations who have invested in a corporate card program, there is duplicative cost and effort involved in maintaining two employee expense systems. In addition to paying for and managing a corporate card program, organisations also have to process and reimburse out-of-pocket expenses for employees choosing to use personal cards, adding to the complexity of an already time-consuming process.

“Business spend has been shifting over the last decade, with more employee-driven, decentralised purchasing, a trend only strengthened by the pandemic this year,” said Singh. “In addition to typical travel expenses, employees today pay for software, digital advertising, office supplies, and more by credit card. Organisations need to consider how to manage and track card spend more efficiently while also minimising the financial burden on employees.”