A service credit card is a business card issued to employees of a company, where the employer controls the account and the employee uses it to make purchases on the company's behalf.

Unlike a personal credit card, a service credit card stays in the employer's name. The employee receives a card linked to that account and can spend up to a limit set by the employer. The employer receives one bill for all employee spending, making it easier to track business expenses in one place. The card issuer reports the account activity to the employer's credit file, not the employee's.

Service credit cards are most common in industries where employees make frequent small purchases — restaurants, retail, delivery services, and field service companies. They differ from corporate cards (which are typically for higher-spending executives) and from employee reimbursement programs (where the employee pays first and gets money back later).

Key Takeaways

  • The employer owns the service credit card account, and the employee's spending appears on the employer's bill and credit report, not the employee's.
  • Service credit cards usually come with per-transaction limits and daily spending caps that the employer sets for each cardholder.
  • The employer receives one consolidated bill for all employee card spending, which simplifies expense tracking and reconciliation.
  • Employees typically have no personal liability for charges made on a service card, since the employer is the account holder.
  • Service credit cards can help employers build business credit history, but they do not help employees build personal credit.

How the account structure works

The employer applies for and opens the service credit card account in the company's name. The card issuer runs a credit check on the business, not on individual employees. Once approved, the employer receives the primary card and can order additional cards for employees. Each employee card is linked to the same master account.

The employer sets spending limits for each cardholder — for example, $500 per day or $2,000 per month. Some issuers allow the employer to set different limits for different employees or to restrict certain categories of spending (such as blocking gas purchases or limiting restaurant spending). The employee can spend only up to the limit the employer has set; the card will decline if the transaction exceeds it.

At the end of each billing cycle, the employer receives a single invoice for all spending across all employee cards. The employer pays the bill in full, and the account activity appears on the employer's credit report. The employee's personal credit report is not affected by the card's use or payment history.

What service credit cards cost

Service credit cards typically charge an annual fee per card — this varies by issuer and card type, ranging from no fee to $100 or more per card per year. Some issuers charge a lower fee for the primary card and a higher fee for each additional employee card. A few issuers waive the annual fee if the account meets a minimum spending threshold.

Interest rates on service credit cards are usually higher than rates on personal cards, often in the 16% to 24% range, though this depends on the issuer and the employer's creditworthiness. However, most employers pay the full balance each month to avoid interest charges. If the account does carry a balance, interest accrues on the unpaid amount.

Some service credit cards offer cash back or rewards on certain categories of spending — for example, 2% back on fuel or 1% on all other purchases. The rewards accrue to the employer's account, not to the individual employee. A few issuers offer additional perks like purchase protection or extended warranties.

Service cards versus corporate cards versus reimbursement

A service credit card is owned by the employer, has per-employee spending limits, and produces one consolidated bill. The employer controls the account and the employee has no personal liability. Rewards go to the employer.

A corporate card is also employer-owned but is typically issued to higher-level employees or executives with higher spending authority. Corporate cards often come with higher credit limits, more premium benefits, and sometimes personal liability clauses that make the employee responsible for fraudulent charges. The structure and billing are similar to service cards, but the spending authority and perks are greater.

An employee reimbursement program works differently: the employee uses their own personal credit card to make the purchase, then submits a receipt to the employer for reimbursement. The purchase appears on the employee's personal credit report and the employee is responsible for paying the card bill. The employer reimburses the employee after reviewing the receipt. This approach gives the employee more flexibility but requires the employee to float the cost until reimbursement arrives.

Who issues service credit cards

Major issuers of service credit cards include American Express (Business Centurion and similar products), Chase (Ink Business cards with employee card options), Capital One, Discover, and Citi. Regional banks and credit unions also offer service card programs, though with fewer features and lower spending limits.

The issuer's requirements for opening an account typically include a business tax ID (EIN), proof of business registration, and a personal may provide from the business owner. The issuer will review the business's credit history and may request financial statements or bank statements. Approval usually takes one to two weeks.

Different issuers have different rules about how many employee cards you can order, what spending limits are available, and what controls the employer can set. Some issuers allow real-time spending alerts and mobile app controls; others offer only monthly statements. Comparing issuers' control features and fee structures is important if spending management is a priority.

Advantages for employers

Service credit cards consolidate employee spending into one bill, which simplifies accounting and reconciliation. Instead of processing dozens of individual reimbursement requests, the employer receives one invoice and can match it against receipts or expense reports. This reduces administrative work and speeds up the close of the accounting period.

The cards also give the employer real-time visibility into spending. Most issuers provide online dashboards where the employer can see which employee spent what, when, and where. This makes it easier to spot unusual activity, enforce spending policies, and budget for business expenses.

Service cards can help a business build credit history. The account activity and payment history appear on the employer's business credit report, which can improve the company's credit score over time. A stronger business credit score can lead to better terms on loans and lines of credit in the future.

Disadvantages and risks

The employer is liable for all charges on the account, even if an employee makes an unauthorized or fraudulent purchase. While most issuers offer fraud protection, the employer typically has to dispute the charge and prove it was unauthorized. During the dispute period, the employer may still be responsible for the amount.

If an employee leaves the company, the employer must cancel that employee's card when ready to prevent further spending. If the card is not canceled quickly, the departing employee could continue to use it. The employer should have a clear process for collecting cards and notifying the issuer when an employee is terminated.

Service cards can also create a false sense of security around spending controls. An employee might spend up to the daily limit every day, which could exceed the employer's budget over time. The employer needs to monitor spending regularly and adjust limits if necessary.

Frequently Asked Questions

Does a service credit card help an employee build personal credit?

No. The account is in the employer's name, so the payment history and account activity do not appear on the employee's personal credit report. The employee receives no credit-building benefit from using a service card. If building personal credit is a goal, the employee would need to use a personal credit card.

What happens if an employee uses the card for personal purchases?

The employer is responsible for paying the charge, since the account is in the employer's name. The employer should have a clear policy stating that the card is for business use only and should review statements regularly to catch personal charges. If personal spending is discovered, the employer can require the employee to reimburse the company for those charges.

Can an employee be held personally liable for charges on a service card?

Generally no. The employer is the account holder and is liable for all charges. However, the employer can require an employee to reimburse the company for unauthorized or policy-violating purchases. Some employers include this requirement in the employee handbook or in a signed card agreement.

What should I do if a service card is lost or stolen?

Contact the card issuer when ready to report the card lost or stolen. The issuer will cancel the card and issue a replacement. Most issuers have fraud protection that limits the employee's or employer's liability for unauthorized charges made after the card is reported. Keep the issuer's phone number in a safe place so you can call quickly if needed.

Can I set different spending limits for different employees?

Most issuers allow you to set individual limits for each cardholder. Some also allow you to restrict spending by category — for example, allowing one employee to spend on fuel but not on meals. Check with your issuer about what controls are available in their platform before you open the account.