May 24, 2022

What is a ghost card? Here’s how using a ghost card for business expenses can cost you

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Imagine your employees coming to you looking for approval to spend on some job-essential items. Instead of giving them a set budget or a prepaid debit card for business, you simply assign each of them a credit card number with no spending limit. What do you think happens next? It’s a recipe for financial disaster. This is called the “ghost card effect.”

This dilemma is more serious than a simple debate over secured vs unsecured business credit cards. Ghost credit cards are generally connected to unsecured business credit cards, opening the company up to expenses they have no control over.

In this article, we'll explain what ghost cards are, their downsides, and why Ramp is a worthwhile alternative for business owners looking for robust spend controls and visibility.

What is a ghost card?

Ghost cards are credit card numbers assigned to specific departments within the business. Anyone in that department can use them, so there’s very little accountability. In most cases, there are also no spending limits attached to them, so employees can spend freely without much oversight.

Ghost credit card advocates and providers preach that itemizing expenses by department is a revolutionary feature. This system expands purchasing privileges to more employees within the company, eliminating the need for expense reimbursement programs. Ghost cards can also be issued to suppliers, giving them the ability to charge the company whenever an order is processed.

If everyone with a ghost card number spends responsibly and ethically, this system can streamline reporting and invoice reconciliation. Unfortunately, it often doesn't work this way; one Forbes Advisor poll reported that 33% of small businesses note credit card fraud as a major issue.

Even without fraudulent or malicious intent, human beings make mistakes and sometimes overspend. Ghost cards simply don’t offer the spend controls to prevent this.  

Downsides of using ghost cards for business expenses

Ghost cards have a purpose in specific situations, like helping a family member in need or granting purchase power to someone in a remote location. They’re just not a good fit for small business expense management. Corporate cards are a better option for several reasons, which we’ll get into below. The downsides of ghost cards in business include the following:

Vulnerability to fraud

Assigning a credit card number to an entire department is an invitation for members to commit credit card fraud against your company. It could be something as minor as buying their morning coffee or supplying their home with paper goods and office supplies. Your accounting department won’t catch that with a ghost credit card.  

Higher interest rates

Ghost cards are connected to your business credit card account number. That means you’re paying interest on unpaid balances. According to WalletHub, the average interest rate on a business credit card in 2022 is 18.32% for new accounts and 14.56% for existing accounts. You’ll be paying that on every department purchase made with a ghost card.    

Lack of spend controls

Small business owners don’t have the luxury of carte blanche spending power, so they shouldn’t give it to their employees. It’s impossible to manage costs without spend controls. Ghost credit cards don’t offer them, which opens your business up to hefty bills at the end of the month.

No personal accountability

Sharing a credit card number with an entire department eliminates personal accountability. That puts pressure on the department head to monitor individual purchases. Unfortunately, most ghost cards don’t give them the tools to be able to do that. This means that misuse of company funds may not be revealed until the next budget review, and will fall solely on the department head’s shoulders.

Ghost card vs. corporate, procurement, business credit, and debit cards

There are several alternatives to ghost cards that could be a fit for your business. Choosing the right one involves evaluating how many purchases are made each reporting period, how many people are involved in purchasing and expenses, and the size of your business. Here are some of your options:  

Corporate cards

Corporate cards come with control features and many of them offer virtual cards for ease of use. With a ghost card, the company assigns one credit card number to an entire department. That number is attached to the main business credit card. With a corporate card, expenses can be itemized by user and managed with spend controls and expense limits.  

Procurement cards

A procurement card (or p-card) is a corporate charge card issued to employees for small expenses that they don’t need to go through a procurement process for. They are unique to the individual employee so that expenses can be tracked. Procurement cards are good for small businesses because you can set spending limits and help employees to keep their expenses down.     

Business credit cards

Business credit cards charge interest, but not if you pay the full balance off each month. They are a good choice for sole proprietors and entrepreneurs who don’t need to monitor spending across multiple employees. Plus, they generally offer rewards programs that can be used for travel or meal expenses. 

Debit cards

A debit card works like a credit card but has a spending limit set by a preloaded balance. Many companies use debit cards to control spending or fund special projects. The budget for the project can be loaded as needed and the card can be “recharged” when necessary.

Ramp: (the best) ghost card alternative

Ramp is a great alternative to ghost credit cards because your company remains in control of how and by whom company funds are spent. Ramp’s easy-to-use dashboard can be used to set spending limits and designate user permissions for individual credit cards or at scale.

Unlike ghost cards, Ramp corporate cards are a safe and secure option for any size business. Spend controls are built-in and can be adjusted to fit individual situations. You can also request that users provide receipts (after checkout) for specific credit card payments.

Plus, our platform connects via API to popular accounting software such as QuickBooks and Xero, and we offer a wide range of perks and pricing intelligence to help your company thrive and grow while saving money.

Ready to learn more? Explore our interactive demo.

The Ramp team is comprised of subject matter experts who are dedicated to helping businesses of all sizes work smarter and faster.


What is a ghost purchase?

A ghost purchase is a card payment made with a ghost credit card. The purchase is assigned to a department, not an individual, which makes personal accountability almost impossible.

What is the difference between a virtual and a physical ghost card?

Ghost credit cards are completely digital, so there is no physical card alternative. Plastic cards are often used for corporate charge cards, debit cards, or business credit cards, and tend to feature a name, card number, expiration date, and security code. 

Does it matter if I use my ghost card online?

Retailers may notice a company address assigned to your card as opposed to a personal address, but as long as the card is valid and payment terms are adhered to, this won’t cause an issue.

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