A guide to prepaid business credit cards
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Unlike traditional credit cards, which draw from a line of credit, prepaid business cards use your own preloaded funds. As a result, you can't accumulate interest on these cards and they don't require a credit check. Charge cards, which we’ll cover below, also come with no interest or credit check.
Businesses can offer employees prepaid cards to pay for work-related expenses, rather than reimbursing them using their personal cards. This is one means of empowering employees to make purchases using company money while controlling for budget.
Top 5 prepaid cards for businesses
If you’re interested in using prepaid credit cards at your business, here are three options you can consider:
1. Bento for Business Visa® Debit Card
Bento provides a strong user experience and advanced technology. The setup is simple, and they offer a free sixty-day trial for up to fifty cards. After sixty days, monthly subscription prices range from $29 to $149, based on the number of cards you need.
- Features: Spend controls, corporate cards, virtual cards for business, invoice payments, analytics and reporting, accounting integration, receipt capture, mobile app
- Deposits: The Bento for Business Visa® Debit Card doesn't support direct deposits. Funds can be added to the Bento account only through ACH transfer or wire transfer from the business owner's external bank account
- Rewards: None
- Fees: $29–$149 per month
- Maximum prepaid limit: $25,000
2. PEX Card
PEX has built its user base in the non-profit 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 non-profits.
- Features: Expense management, cardholder app, QuickBooks/data integration, API integrations, real-time reporting, live chat support, discounts for non-profits
- Deposits: The PEX Card allows account funding through Electronic Funds Transfer (EFT), ACH credit, outgoing ACH transfer, wire transfer from a business checking account, and debit from a bank account via PEX ACH Service.
- Rewards: None
- Private sector business fees: $49.95 set-up fee, $75–$300 per month
- Nonprofit fees: $39.95 set-up fee, $30–$80 per month
- Maximum prepaid limit: $25,000 for private sector businesses, $5,000 for rewards and grants
3. Netspend® Small Business Prepaid Mastercard
A long-time presence in the consumer space, Netspend® now offers a small business prepaid Mastercard. This card is good for sole proprietorships and start-ups looking to separate business and personal expenses, but it’s limited for larger firms with multiple teams.
- Features: Prepaid cards, mobile app, employee sub-accounts
- Deposits: The Netspend® Small Business Prepaid Mastercard supports direct deposits. This feature allows for the direct deposit of paychecks, tax refunds, and government benefits into the card account.
- Rewards: Mastercard Easy Savings® at selected merchants
- Fees: $9.95 per month, 35% for foreign transactions
- Maximum prepaid limit: $25,000
4. Greenlight® Business Debit Mastercard®
Greenlight® is known for its user-friendly platform designed specifically for small businesses and startups. The card offers unique budgeting and expense tracking tools, ideal for managing business expenses efficiently.
- Features: Customizable spend controls, real-time expense tracking, instant alerts, automatic categorization of spending, integration with accounting software, free ATM withdrawals, mobile app access.
- Deposits: The Greenlight Business Debit Mastercard supports direct deposit, allowing cardholders to automatically deposit paychecks onto their card.
- Rewards: Cash back on all purchases, exclusive discounts at partner merchants.
- Fees: No setup fee, monthly fees range from $4.99 to $9.99, no foreign transaction fees.
- Maximum prepaid limit: $10,000.
5. Emburse Card
Emburse offers advanced expense management capabilities, including the creation of virtual cards, real-time expense tracking, and customizable spend controls. Key features include budget limits, merchant category controls, and seamless integration with accounting software, making it ideal for detailed financial oversight.
- Features: Virtual card creation, real-time expense tracking, customizable spend controls, accounting software integration.
- Deposits: Supports EFT, ACH credit, and wire transfers.
- Rewards: Cash back program based on usage and plan.
- Fees: Varies with plan; transparent pricing with no hidden costs.
- Maximum prepaid limit: Depends on the business’s financial profile; adjustable based on needs.
What is the highest amount you can put on a prepaid business card?
The maximum amount you can load onto a prepaid business credit card ranges from a few thousand to tens of thousands of dollars, depending on the card.
The Bento for Business Visa® Debit Card, PEX Card, and Netspend® Small Business Prepaid Mastercard all have a maximum limit of $25,000. The Greenlight® Business Debit Mastercard® has a limit of $10,000 and the Emburse Card’s limit depends on your business’s credit profile.
Benefits of prepaid credit cards for businesses
Prepaid credit cards eliminate the need for time-consuming requisition forms and approvals involved in the expense reimbursement process. Employees can make necessary purchases within set limits, saving time and increasing productivity.
Here's a full list of the perks of using prepaid business credit cards:
Easily control employee spending
Putting the entire budget in the hands of a manager for a long-term project might be risky. With a prepaid business credit card, you can choose to fund one milestone at a time. This setup can also help manage cash flow for your sales team or marketing department. Each card can be issued with a specific amount, keeping expenses within set parameters.
No lengthy reimbursement process
Traditional expense systems require employees to use their personal cards for expenses. They 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. 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 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.
Rewards programs can be employee incentives
Some prepaid credit card companies offer rewards programs that your company can use as employee incentives. These could include cashback incentives or partner rewards, both of which could be channeled into bonus programs for your employees.
Disadvantages of prepaid credit cards for businesses
Limited credit-building opportunities
Prepaid credit cards do not contribute to a business's credit history. Unlike traditional credit cards, using a prepaid card doesn’t involve borrowing or making repayments, which are key activities reported to credit bureaus for building credit. Charge cards, on the other hand, can help build business credit.
Inflexible funding limits
These cards require upfront loading of funds, which could tie up business capital. Additionally, the maximum amount that can be loaded is often lower compared to the credit limits offered by conventional business credit cards, potentially limiting larger business transactions.
No rewards for spending
One of the most attractive features of credit cards is the rewards or cashback on spending, which is generally not available with prepaid cards, meaning you're missing out on potential benefits.
Prepaid credit cards vs. charge cards
For startups and small to medium-sized businesses, corporate charge cards are another alternative to prepaid business debit cards.
Charge cards work differently than prepaid cards. Instead of being preloaded, they allow users 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.
Unlike prepaid cards, however, corporate charge cards typically come with more features that businesses can use to manage their expenses. Here are a few of the benefits of charge cards:
Don’t need to be paid in advance
Prepaid credit cards must be fully funded in advance, giving them a preset spending limit. Charge cards don’t require prepayment. Since the money needs to be loaded in advance, businesses that elect to use prepaid cards may find themselves tying up valuable capital that could be used elsewhere in the company.
Not limited by a prepaid amount
The amount that’s loaded onto a business prepaid credit card is a business’s estimate of how much their employees will need. Prepaid card users who want more money than is available on their cards typically need to pay an overdraft fee to access it. Charge card users aren’t limited by predetermined limits. Instead, your monthly spend limit is flexible, giving you the buying power your business needs to get ahead.
Fewer associated fees
Prepaid cards can come with multiple fees, including transaction fees, monthly fees, out-of-network fees, cash reload fees, balance inquiry fees, inactivity fees, card transfer fees, and more. Charge cards have substantially fewer fees associated with them.
Charge cards: an alternative to prepaid cards
Ramp is so much more than just a business card. It’s a spend management solution for start-ups, small businesses, and enterprises. In addition to providing charge cards for your organization, Ramp provides expense management, accounts payable software, real-time expense reports, and seamless integrations with collaboration tools, security, and accounting software.
With Ramp, there’s no charge to set it up, no fees to use it, and no interest charges on purchases. You don't need to personally guarantee your Ramp account and there’s no credit check required.
- Unlimited users with unlimited virtual and physical cards
- Automated receipt matching and verification
- Category, merchant and spending limits
- Multi-step request and approval flows
- ACH reimbursements
- Smart accounting integrations
- Multi-factor authentication and single sign-on (SSO)
- Advanced roles and permissions
- Dedicated account managers
Cross out the complexity of expense reimbursement, streamline your cash flow management, and empower your employees to perform at peak levels with Ramp.