Prepaid Business Credit Cards: A Way to Control Expenses

A prepaid credit card could benefit your small business.

Prepaid business cards are reloadable prepaid cards that contain a fixed amount of funds. The funds can be used to cover business expenses, including travel, supplies and meals. Prepaid business cards are useful for making sure you stick to your own business budget, or they can be issued to employees to control their work-related spending, along with other business credit card benefits.

How Do Prepaid Credit Cards Work?

Unlike a regular debit card, prepaid business credit cards are not linked to a bank account. Instead, prepaid credit cards are loaded with a fixed amount of money and must be reloaded when funds are depleted. There are several pros and cons of prepaid business credit cards to consider before deciding to get one.

Advantages of Prepaid Cards for Business

Prepaid business cards can be beneficial for employers and employees alike. Here are some of the advantages of using these types of cards:

  • Easy to get: You don’t need to tie a prepaid business card to a particular bank account, and since there’s no credit check required, you could get instant approval. Prepaid cards are not reported to the three major credit bureaus so they will not affect your credit rating.
  • Convenient to use: Prepaid business cards can be used just like a regular debit card. They are accepted everywhere debit cards from the credit provider are accepted, and can be used to make purchases in-store, online and via phone.
  • Control and track employee spending: You can set the spending limit for your employees for work-related expenses by loading the card with a limited amount of money of your choosing. You can also track what they are spending business funds on, and ask for reimbursement if the card is not being used properly.
  • Keep personal and business spending separate: If you’re a small business owner, having a separate business card can help you track your work-related spending.
  • Manage spending remotely: Some card companies allow you to monitor business card transactions from your computer or from an associated mobile app.

Learn: 26 Things You Need to Know to Build Credit

Disadvantages of Prepaid Cards for Business

Before issuing a prepaid business credit card for yourself or your employees, it’s important to understand the pros and cons of prepaid cards. One of the biggest disadvantages is that multiple fees could be charged when using this kind of card. Be sure to read the cardholder agreement in full to know exactly what fees your card will require. Fees associated with prepaid business credit cards could include:

  • Monthly fee for the master account
  • Monthly fees for each additional card
  • Foreign transaction fees
  • Cash withdrawal fees
  • Transfer fees
  • Balance inquiry fees
  • Stop payment fees

Another disadvantage is that purchases made with prepaid business cards don’t earn rewards or travel credits. If these types of incentives are valuable to you or your business, it might be better to opt for a regular business credit card.

Who Should Use Prepaid Business Credit Cards?

Most prepaid business credit cards are geared toward small business owners. They are useful for business owners who want to track and control spending. Prepaid cards might be your card of choice if you prefer not to use business credit cards but still need a card.

Related: Best Prepaid Credit Cards

Prepaid Business Card Brands

Prepaid business cards are often backed by Visa or MasterCard, but fees can vary based on the card issuer. Here are two prepaid small business credit cards to consider:

Prepaid Business Cards At-a-Glance
Prepaid Business Card Setup FeeMonthly FeeMonthly Fee for Additional Cards
NetSpend Small Business MasterCard$0$9.95; waived if monthly purchases exceed $10,000$1.95
PEX Visa Prepaid Card$49.95$75 for up to 20 cards, $200 for up to 100 cards; waived if monthly purchases exceed $50,000$4 for up to 20 cards, $2 for up to 100 cards

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