Online Business

Prepaid Business Cards: Answers to Frequently Asked Questions

Nowadays, a prepaid card for business has become one of the most beneficial allies of many businesses. This does not come as a surprise however as prepaid cards for business come with benefits that are truly hard to match. For starters, they can be a convenient way for employees to pay for their expenses.

Employers can provide their staff with prepaid cards and load each card with money. Why is this setup preferable? One, unlike a business debit card, employees won’t have access to the company bank account. Second, unlike credit cards, employees won’t be able to accumulate debts.

How prepaid cards for business work

With a prepaid card for business, employers can load as much money as they would like, at any time convenient for them. Depending on the issuer, they will have different ways of reloading money onto the card. Over the phone, online, or via a secure login portal are some of the reload options available at one’s disposal.

Some issuers of prepaid cards will allow you to manage a few aspects of your prepaid card through an online console. And the great thing is it is all for free. That means you can check your activities, make money transfers, and freeze the cards in case of loss or theft. 

Prepaid cards for business versus business debit and credit cards

Nowadays, business prepaid cards are considered the ideal alternatives to debit and prepaid cards. How are the three different from each other? Let us start by comparing some of their features.

When you use a business debit card, you will be using money that’s available in your account. In other words, you’ll be spending against whatever balance it is that’s available in your bank account. 

This kind of setup also allows cardholders to spend as much as they like. Understandably, giving employees access to business debit cards can be very risky. This is especially true for business owners who have large teams.

With a debit card, employers need to be very careful about who they give access to the card to. They have to be sure they are responsible and can be trusted. And since only one debit card is used, it is possible for more than one employee to have access to the card. This can make it very difficult for the finance team to track whoever used the card and for what during auditing and reconciliation.

A business credit card, on the other hand, is linked to the employer’s line of credit and the monthly or annual credit limit will determine how much the cardholder can spend. Of course, business credit cards are more susceptible to misuse. Also, since you won’t get the statement until the end of the month yet, it makes it difficult to resolve any misuse as they happen. 

Frequently Asked Questions

What are some of the enticing benefits of prepaid business cards?

Prepaid cards can be a very convenient way to manage to spend. For starters, businesses can load whatever amount they want and cardholders are limited to the balance that’s available on the card. Also, if you’re a business that has not built any credits yet, it won’t hinder you from being issued a prepaid card.

Are prepaid cards right for my business?

Regardless if you have 10 employees or a thousand, prepaid cards can be a wonderful option for you. They are also considered particularly helpful for SMEs and startups since you don’t need to have an impressive credit score before applying. They are especially beneficial for large businesses as you can easily allocate as many cards as you deem fit.

Is a credit check needed when I apply for a prepaid card?

While some details of your business will be looked into, issuers of prepaid cards will not take into consideration your credit history. This is very useful if you are just starting out and have not built up your credit score yet.

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