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What's a good policy on personal use of company credit cards?

by on
in The HR Specialist Forum

"In the past we've turned a fairly blind eye when employeess have used company credit cards for personal expenses. As long as they wrote us a check right away, we let it slide. But now credit card issuers are lowering credit limits and raising interest rates even for good customers like my company. I feel like it's time to clamp down on personal use of our cards. Have any of you done this? Can you share some sample policy language I could borrow?"—Tim, Indianapolis



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{ 6 comments… read them below or add one }

Sheila December 16, 2008 at 3:14 pm

We use AMEX Corporate Cards. The cards are in the employee’s name and the bills goes directly to them. They are the only ones responsible for payment – not our company.
The only downfall is that if one person is constantly late, the annual fee is increased for each card holder (the company pays the annual fee). We have one employee who was terminated 3 years ago with a huge balance – it will be a long time before our annual fees decrease.

Reply

Danille December 16, 2008 at 2:49 pm

A good rule of thumb is to not use company credit card for personal expenses. It can create a cycle of indebtedness that may be too hard to break. We once had an employee who used hers to eat at our competitor’s every day and to purchase an entire wardrobe. When we terminated her for misconduct (not related to the charges), we could not get her to repay the charges and we could not withhold it from her last check.

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Darrel December 11, 2008 at 9:49 am

Just say NO! Then, make violations subject to your discipline policy, verbal warning, written warning, termination; or whatever your policy is.

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GHughes December 10, 2008 at 3:19 pm

Our’s is very simple. It is just not allowed. Company credit cards are for company business. No exceptions.

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Lyn December 10, 2008 at 11:11 am

This assumes that employees are issued their own cards: If your company pays its credit card bills in full each month, then interest rates don’t matter. However, if there is a running balance, then your company might post a policy stating that personal use of company credit cards is not encouraged, but, if it happens, the employee will be expected to pay not only the charge, but also the interest attributed to that charge. When an employee pays, the company might send the payment directly to the credit card company (as an extra payment) to insure that the charge is paid as soon as possible. Our company has a policy in the Employee Handbook stating that employee charges may be paid immediately or withheld from the employee’s next regular scheduled paycheck.
Another suggestion is to create a policy making it mandatory to have all credit card use pre-approved by the person in charge. (Manager, owner, CEO, etc.) Business use of a credit card is seldom unplanned. Anything not pre-approved becomes a “personal” charge to be repaid.

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John December 10, 2008 at 9:06 am

If it is for approved company business fine. If not, don’t use it. NO EXCEPTIONS.

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