A guide to prepaid business credit cards

What is a prepaid business credit card?

How do prepaid business credit cards work?

Prepaid business cards can be used wherever you’d use a regular credit or debit card. You can use them in stores or to make online purchases. Some prepaid cards also let you take out cash at ATMs.

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Depending on the card issuer, you can fund your card through different methods like 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 you use your own funds, a credit check isn’t required to qualify.

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Secured business credit cards operate similarly to prepaid cards. You put down a security deposit on the card, which becomes your credit limit. With both types of cards, you’ll need to replenish the balance when you run out to keep making purchases. Secured credit cards report to the business credit bureaus, making them a great option for building your credit score. Prepaid cards, on the other hand, typically don’t build credit.

What is the highest amount you can put on a prepaid card?

The maximum amount you can load onto a prepaid business credit card ranges from a few thousand to tends of thousands of dollars, depending on the card.

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The Bento for Business Visa® Debit Card, PEX Card, and Netspend® Small Business Prepaid Mastercard all have a maximum limit of $25,000.

Benefits of prepaid credit cards for businesses

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. 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 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 credit cards for businesses

Limited credit-building opportunities

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

Inflexible funding limits

These cards require upfront loading of funds, which can 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, limiting larger business transactions.

No rewards for spending

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

3 top prepaid credit cards for business

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
• Rewards: None
• Fees: $29–$149 monthly fee
• 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
• Rewards: None
• Private sector business fees: $49.95 set-up fee, $75–$300 monthly fee
• Nonprofit fees: $39.95 set-up fee, $30–$80 monthly fee
• 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  
• Rewards: Mastercard Easy Savings® at selected merchants
• Fees: $9.95 monthly fee, 35% fee for foreign transactions
• Maximum prepaid limit: $25,000

Alternatives to prepaid business cards

Prepaid debit cards can be helpful for managing your money or employee spending, but they might not be the best choice for your business.

Corporate cards

‍Instead of being preloaded, corporate cards 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.

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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 often come with rewards.

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Discover Ramp's corporate card for modern finance

Learn more

Business debit cards

Linked directly to a business savings or checking account, business debit cards are another way to track and manage business expenses without the risk of debt or interest. These are useful for businesses that prefer spending only existing funds. However, 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 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 corporate cards for your organization, Ramp comes with expense management, bill pay, accounting automation, real-time expense reports, and seamless integrations with accounting software.

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With Ramp, there’s no setup fees, transaction fees, or interest charges. You don't need to personally guarantee your Ramp account and there’s no credit check required.

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Features include:

• 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

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Cross out the complexity of expense reimbursement, streamline your cash flow management, and get the buying power your business needs with Ramp.