A prepaid business card that has specific amounts of funds in it. The money in your card can be used towards business transactions. With a prepaid business card, it will make managing your business budget much easier or to control employee work expenses.
Read below for more information on what a prepaid business card is and what it comes with.
 |
 |
How it Works
Compared to a traditional debit card, a prepaid business card is not connected with a specific bank account. Instead, they are filled with a fixed amount of funds that has to be reloaded when there’s no more money.
Many prepaid business credit cards are catered more towards smaller business owners. Normally, these cards are beneficial to business owners that want to manage and control spending business money. There are several different types of prepaid business credit cards to choose from.
Prepaid Business Card Brands
Typically, a prepaid business card will be partnered with Visa or MasterCard. However, depending on the type of card you get, will make the fees vary. Here are two cards that are better for smaller businesses:
- NetSpend Small Business MasterCard. This card comes with no setup fees and with a $9.95 monthly fee. Worry not, this monthly fee can be waived if your monthly transactions go over $10,000. Furthermore, the monthly fee for extra cards will be $1.95.
- PEX Visa Prepaid Card. Compared to the other card, this comes with a setup fee of $49.95. Additionally, there’s also a monthly fee of $75 for no more than 20 cards, or $200 for up to 100 cards. These fees can be waived if your monthly transactions go over $50,000. Lastly, if you want an additional card, it will be $4 for no more than 20 cards, and $2 for up to 100 cards.
Remember, each card always comes with their own advantages and disadvantages. It would be a good idea to look into how you will benefit and what the downsides are before getting a prepaid card.
Pros of Prepaid Business Cards
Some advantages of owning a prepaid business card is:
- It’s easy to get. You will not need to link this card with a bank account since there isn’t credit involved. Plus, you can get instant approval when you sign up for a card. These cards will not be reported to the major credit bureaus either.
- Simple to use. With a prepaid business card, it will act like a normal debit card. These cards will be accepted at any retailer where debit is accepted. Additionally, you can use it to make transactions in-store, online, or over the phone.
- Control and track employee spending. Set a limitation to the amount your employees can spend towards business-related transactions. Just load the card with a specific amount and track what they’re spending it on. Furthermore, you can ask for reimbursement if the business card isn’t being used correctly.
- Separate personal and business spending. Being a small business owner with a prepaid business card will make things much easier. You’ll be able to keep track of work related expenses and separate your personal expenses as well.
- Manage spending remotely. There are several card companies that will let you keep an eye on business card purchases from a computer or mobile app.
Cons of Prepaid Business Cards
Keep in mind, you need to understand the perks and disadvantages that comes with owning a prepaid business card. One of the largest downsides of this card is the fees it normally comes with. Thoroughly read through the cardholder agreement before you agree to anything. Furthermore, some of the fees that will be included is:
- Monthly fees for a master account.
- For every additional card you get, it will include more monthly fees.
- Some cards carry foreign transaction fees.
- Cash withdrawal fees
- Transfer charges
- Balance inquiry charges
- Stop payment fees
Plus, for transactions that you make with this card, you will not gain any rewards or travel benefits at all. If you tend to travel a lot for your business, then you should consider a normal business credit card.
Conclusion
A prepaid business card will make business transactions much easier to handle and track. You’ll be able to set a limitation on the amount that can be spent, and get many perks along with it. However, prepaid business cards are catered more towards smaller businesses. Not to mention, business travels will not allow you to earn rewards or travel credits. Lastly, owning a prepaid business card will make separating your personal and business expenses from one another.
