Do physical cards need funds added before they can be used?
Short answer
Yes. Physical cards cannot be used until funds are issued to the employee. The card itself has no money—it's just a payment instrument. Funds are spending allocations that contain the actual budget, limits, and rules. When you make a purchase with your physical card, it draws from one of your available funds.
How physical cards and funds work together
Physical cards and funds are separate but connected:
- Physical card: The plastic card in your wallet with a card number for making purchases
- Funds: Spending allocations with specific amounts, limits, and policies issued by your finance team
The relationship: When you make a purchase, the transaction draws from one of your available funds. The physical card is the payment method. The funds are what give it purchasing power.
Why this structure is helpful
Requiring funds before spending serves specific purposes:
- Budget control: Finance teams allocate exact amounts for specific purposes before any spending occurs
- Policy enforcement: Each fund carries restrictions (merchant categories, amount limits, expiration dates) that apply automatically
- Spending flexibility: One physical card can access multiple funds, so you can use the right budget for each purchase
- Real-time visibility: Every transaction ties to a specific fund, making spending transparent
- Prevent overspending: Once a fund balance is depleted, spending from that fund stops until it's replenished
What happens if no funds are available
If you attempt a purchase when no funds are available:
- The transaction won’t go through
- You’ll see a message indicating there isn’t spending available yet
- You can request additional funds or wait for your funds to renew, if they’re recurring
How this differs from loading money onto cards
Some cards require money to be manually loaded onto them before they can be used. In those setups, each card holds its own balance, and spending is limited to whatever amount was added upfront. Managing these balances often means topping up cards, moving money between cards, or issuing new cards when limits change.
With a funds-based approach, money isn't loaded onto individual cards. Instead, spending is tied to allocations that define how much can be spent and under what rules. Cards act as payment methods that draw from these allocations, so budgets and policies can be adjusted without moving money between cards.