P-cards or corporate credit cards: Which is best for business travel

Very few businesses expect employees to use their own personal cash whilst on work trips, but there are some choices to make when it comes to providing company cards. How your business operates, how long work trips tend to be, and many other factors will inform whether corporate credit cards, P-cards, or a mixture of both is the right option.

In this guide, we’ll address the key differences between P-cards and corporate credit cards and offer guidance on how to decide which one is best for your business travelers.  

What is the difference between a P-card and a corporate card?

On a basic level, P-cards are tightly controlled versions of a credit card, with strict limits on spend and even what time of day they can be used. Corporate cards are much more flexible, with fewer restrictions. Let’s take a look at the key differences in more detail:

P-cards

A P-card, sometimes known as a purchasing card or procurement card, is a high-customizable type of business card that has pre-defined limitations, chosen by the company. These can include:

Spend limits 

• These might be per transaction, or daily or monthly limits

Supplier restrictions

• Spending might be tied to pre-approved suppliers

Vendor type limits

• Some P-cards allow businesses to control transactions according to category e.g. a business might place restrictions on certain websites, or items like gift cards. Vendors can be blocked altogether.

Time limits

• Businesses might restrict the use of the card to certain times of day or days of the week

P-cards also reduce the need for purchase orders, making them a good choice for high-volume, low-value procurement. 

This type of card provides a high level of control for employers, and can be suitable for short work trips where the potential for spend is low and restricted to predictable patterns such as purchasing fuel or an Uber booking, a grab-and-go lunch and a gas station coffee. Through travel platforms such as Perk, finance teams can also issue single-use digital P-cards for one off payments.

Repayment on P-cards can be daily or monthly, depending on specific terms.

Corporate Credit Cards

Corporate credit cards or T&E (Travel & Entertainment) cards are used for business expenses and allow employees to easily pay for items, with fewer restrictions than a P-card. 

This includes:

Flexible spend limits 

• Depending on a company’s credit rating, sometimes T&E cards have no limits at all

No supplier or category restrictions

• Spending isn’t tied to pre-approved suppliers, meaning more choice for the employee

No time limits

• Unlike P-cards, where businesses might restrict the use of the card to certain times, T&E cards are not bound by this limitation

They are sometimes linked to loyalty programs or benefits such as airline lounge access or other discounts. Capital One’s Venture X credit card comes with access to 1,300+ lounges globally, for example.

Due to the high level of freedom with a corporate credit card spend, sometimes companies only issue them to senior staff members. They are also useful for business travellers whose plans aren’t fixed, who might entertain clients, or if there’s a chance the trip may need to be extended.

P-cards and T&E cards aren’t mutually exclusive, and many businesses will have reasons to use both. 

T&E cards might be best for sales teams who are often out on business, whilst a P-card might be a better option for a staff member who needs to occasionally buy extra office supplies.

Virtual vs physical cards

Virtual and physical cards serve distinct purposes, and most companies will use a mixture of both. For work travelers, each type of card offers different benefits. 

Common uses for virtual cards

Fraud protection

• Virtual cards have excellent fraud protection capabilities. In some instances, travel managers can generate a single-use virtual P-card, or set active dates for the trip

Less shadow work

• For Perk users, digital cards are a great option as they can be integrated directly within the platform, with transactions logged instantly. When receipts are snapped and uploaded, these are also automatically linked to purchases made on the digital card.

One less thing to pack

• Virtual cards are a great option if colleagues are prone to losing physical cards

Common uses for physical cards

Useful as a backup

• If a digital card fails, a physical card backup is sometimes necessary to complete a transaction. Sometimes hotels require a physical card to allow you to check-in or collect a rental car.

Not reliant on phone battery

• You’ll never have to worry about a physical card running out of charge

How do P-cards and corporate cards reduce shadow work?

On average, employees spend 7 hours a week on shadow work, non-strategic tasks that are outside of core responsibilities. This hidden admin is often a drain on time and energy and can leave workers feeling stuck in an endless cycle of repetitive tasks.

Arguably, both P-cards and corporate credit cards can help to reduce the burden of shadow work for travel managers and finance teams.

• P-cards bypass the whole purchase order and invoicing process, cutting down on admin processing time. Supplier record management is also easier, as the P-card’s issuing bank is responsible for any changes to vendor payment details.

• T&E cards usually integrate with common accounting software like FreshBooks or Xero, removing the need for manual data entry. Both types of card remove the need for manual employee reimbursement from the finance team, which might happen if employees use their own money to purchase ad hoc items for the business. 

How does fraud affect P-cards and corporate cards?

The US accounts for 42% of global ecommerce fraud, so travel managers should be aware of the increased fraud risk of using P-cards during work trips, due to weaker security features and a lack of real-time oversight.

T&E cards, on the other hand, more commonly have enhanced fraud protection features that P-cards don't, like instant card freezing and real-time fraud alerts. In contrast, P-cards operate via delayed reporting cycles. 

Open to abuse by employees

Hypothetically, P-cards could be used for personal items. As long as the item is purchased from an approved supplier, within the card’s limits, and would be detailed on a statement as something business-related, this could fall through the cracks.

Delayed billing cycles

P-card statements are usually issued at the end of a billing cycle rather than immediately, which means unauthorized spending or duplicate payments might not be noticed until much later. This also means patterns of fraudulent behavior could be missed.

Legal considerations

Debt accrued by using P-cards and corporate credit cards comes under corporate liability as it is ultimately the responsibility of the business, not the employees who use them.

To mitigate some of the risk involved with corporate liability, spending policies should be clearly communicated to employees with access to corporate credit cards and P-cards. Travel managers should provide a specific travel expense policy outlining expectations, spend limits, and security best practices. 

Are P-cards or corporate credit cards best for your business?

Work travel means employees accrue several different types of expenses, and you might consider sticking to one type of card for those purposes, or a mixture of P-cards and corporate credit cards.

P-cards - Best for:

• High-volume, low-value procurement

• Tight controls

• Visibility for finance departments

Corporate credit cards - Best for:

• Advanced fraud protection

• Flexibility

• Travel management platform integration

Make managing work travel expenses easier with Perk

No matter which business cards you select for your team, Perk can help take the stress out of business travel expense management. From instant virtual cards to ERP integration, Perk gives time back to employees to focus on real work with real impact.

Request a demo to see how Perk can help your team prioritize the job at hand.