A guide to prepaid business cards

What are prepaid business cards, and how do they work?

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A prepaid business card works just like a regular business credit or debit card. You can use them anywhere that accepts card transactions, including both physical stores and online retailers. Some prepaid cards also let you withdraw cash at ATMs.

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Depending on the card issuer, you can fund your card through various methods, including bank transfer, direct deposit, or ACH. Some issuers offer employee cards that you can fund from your main account.

Are prepaid cards the same as business credit cards?

Prepaid business cards and business credit cards have some notable differences. Prepaid cards are funded using your own bank account, whereas credit cards have a revolving credit line. Since the spending power of a prepaid business card is determined by your own funds, you don’t need a credit check to qualify for one. The downside is that prepaid business cards won’t help you build business credit.

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Secured business credit cards operate similarly to prepaid cards insofar as you put down a security deposit that determines your spending limit. With both types of cards, you’ll need to replenish the balance when you run out to keep making purchases. Secured credit card issuers report to the business credit bureaus, making them a great option for building your credit score.

What’s the maximum amount you can load onto a prepaid card?

The maximum amount you can load onto a prepaid business credit card depends on the card you choose, but the amount can range from a few thousand to tens of thousands of dollars.

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Many prepaid business cards allow you to hold up to $100,000 in your account but set much lower limits at the card level.

Benefits of prepaid cards for businesses

Easily control employee spending

Putting the entire budget for a long-term project in the hands of a manager might be risky. With a prepaid business card, you can set spend limits for each major milestone. This setup can also help manage cash flow for your sales team or marketing department. You can issue every card with a specific amount to keep expenses within set parameters, and many prepaid business cards offer the option of spinning up virtual cards as well.

No lengthy reimbursement process

Traditional business expense systems require employees to use their personal cards for expenses. They then submit receipts for expense reimbursement, a cycle that can take weeks or even months to complete. That’s asking a lot from your employees. With a prepaid card, none of that is necessary. Employee expenses are covered by company funds on their prepaid cards.  

Cleaner accounting records for tax filings

Using prepaid business credit cards contributes to more organized accounting records. Each transaction is automatically recorded and categorized, simplifying the business expense tracking process for accurate and efficient tax filings. This can also be helpful should your business have to respond to an audit by the IRS.

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Disadvantages of prepaid business cards

You won’t build business credit

Prepaid cards don't contribute to your business's credit history. Unlike traditional business credit cards, using a reloadable prepaid card doesn’t involve borrowing against a credit limit or making repayments, which are key activities reported to credit bureaus that help build business credit.

Inflexible funding limits

Because prepaid cards require you to preload funds upfront, they can tie up business capital. Additionally, the maximum amount you can preload onto a prepaid card is often lower than the credit limits offered by conventional business credit cards, which inhibits your ability to make larger business purchases.

No rewards for spending

For small business owners, a cashback or rewards program is one of the most attractive features of business credit cards. Prepaid cards generally don’t offer rewards for spending.

3 top prepaid cards for businesses

If you’re interested in using prepaid credit cards at your business, here are three options you can consider:

1. PEX Prepaid Expense Visa®

PEX has built its user base in the nonprofit and educational space, but they’re making inroads into the private sector with advanced technology and a modern user experience. They offer business pricing and reduced monthly and annual fees for nonprofits. PEX is unique in that there’s no limit to how much money you can preload into your account, although each card has a maximum limit.

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• Features: Expense management, cardholder app, QuickBooks/data integration, API integrations, real-time reporting, live chat support, discounts for nonprofits
• Rewards: None
• Monthly fees for private sector businesses: $75–$200+ depending on the number of cards in use
• Monthly fees for nonprofits: $30–$80+ depending on the number of cards in use
• Maximum prepaid limit: $25,000 per card for private sector businesses; $5,000 per card for rewards and grants; no limit at the account level

2. dash™ Prepaid Mastercard®

A popular choice for small businesses, dash™ offers prepaid cards with an integrated app to track spending. It has no monthly fees, which makes it an attractive choice, but each card has a limit of $10,000, and you’re limited to a max of $100,000 in your main account. It’s also worth noting that you can’t use your dash™ card to withdraw cash or check your balance at an ATM.

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• Features: Expense management, real-time reporting, live chat support
• Rewards: None
• Monthly fees: $0
• Maximum prepaid limit: $10,000 per card; $100,000 per account

3. Emburse Spend prepaid cards

Emburse offers an expense management platform that integrates with their prepaid business cards. The platform lets you track spending, implement spend limits, and spin up an unlimited number of virtual cards for your employees. However, you can’t use Emburse cards at ATMs, and while the cards themselves are free, you’ll have to pay for a subscription to the Emburse Spend expense management platform. Emburse doesn’t publish pricing information.

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• Features: Unlimited physical and virtual cards, expense management, real-time reporting, live support
• Rewards: 1% cashback on all purchases
• Monthly fees: No monthly fees for the cards themselves, but you’ll need to pay a subscription fee for Emburse’s SaaS platform
• Maximum prepaid limit: $100,000 at the account level, but you can request a higher limit, subject to approval

Alternatives to prepaid business cards

Prepaid cards can help manage your money or employee spending, especially if you’re just starting out. But over the long term, they might not be the best choice for your business.

Corporate cards

‍Instead of being preloaded, corporate cards allow you to make purchases and accrue a balance up to a flexible spending limit, which must be paid in full at the end of each billing cycle. Like prepaid cards, they don't accumulate any interest.

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Corporate cards come with added features, like expense management tools and finer controls for employee spending. They also report to the business credit bureaus, helping you build your business credit score, and they often come with rewards like cashback.

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Discover Ramp's corporate card for modern finance

Learn more

Business debit cards

A business debit card links directly to your business savings or checking account. It offers another way to track and manage business expenses without the risk of debt or interest, without the chore of preloading cards weekly or monthly. These are useful for businesses that prefer spending only existing funds, but, like prepaid cards, business debit cards don’t help build credit, and they don't offer rewards.

Consider Ramp's corporate charge card for your business

Ramp is more than just a business card. It’s a complete expense management solution that saves businesses an average of 5% a year.

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In addition to providing corporate cards for your organization, Ramp comes with spend tracking, bill pay, accounting automation, real-time expense reports, and seamless integrations with your existing accounting, security, and collaboration tools.

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Ramp has no setup fees, transaction fees, or interest charges, and we don’t require a personal guarantee or credit check. Nix the complexity of expense reimbursement, streamline your cash flow management, and get the buying power your business needs with Ramp.