Prepaid Card for Business: Here’s How They Work
Nowadays, there is a fresh and innovative financial tool that’s taking the corporate world by storm—prepaid card for business. Many companies are now ditching their high-limit credit cards in favour of prepaid cards for business. Why? Because they are considered a more secure option offering numerous enticing benefits.
Once considered a financial solution available only for individual consumers, prepaid cards for business are now making their mark and proving their worth in the corporate setting. In fact, many successful entrepreneurs today have them.
The significant spike in the popularity of business prepaid cards is not exactly surprising. From ease of use to robust security, these awesome financial tools offer many other wonderful benefits that sets them apart from the rest. So how exactly do prepaid business cards work?
Prepaid Card Basics
While similar in look and design, prepaid cards have a lot of distinct differences from the typical credit cards. For instance, when applying for a credit card, the issuer will need to look into the profile and financials of the business first before an application is granted.
In addition, corporate prepaid cards spares businesses from the risk of overspending as it only allows users to limit their spending based on the balance that’s available on the card. And since the money is drawn directly from the account and not borrowed from the issuer, there is no worry about accumulating debts and paying costly interests, fees, and charges.
Obtaining a prepaid card for one’s business is way easier compared to applying for a credit card. Since prepaid cards don’t come with credit capabilities, getting approved for one is pretty much stress and hassle-free.
Once approved, businesses have the option to customise the cards with the business colours and logo. There is also an option to issue the card to specific employees or have just one generic card anyone can use.
One of the primary reasons many businesses have ditched their credit cards can be attributed to the adjustability of the limit of the card. Since the money is not borrowed from the issuer, the risk of overspending is effectively eliminated.
In addition, users also have the option to add and load money to the card as needed. So regardless if funds are added daily, weekly, quarterly, or monthly, employees will be forced to adhere to the allocated budget and not spend as they please.
Doing spending reviews is a lot easier when using a corporate prepaid card. In addition, since reconciling monthly reports is more straightforward, it is easier for business owners to see and analyse where money is going. Also, based on the spending, it is a lot easier for business owners to see the pattern of spending and decide how much should be loaded in the cards.
When using a corporate credit card, the risk of theft is significantly reduced. Using a prepaid card for business transactions is considered way safer as it limits the amount of money employees have access to. In addition, since the card is not linked to the bank account, the balance in your savings or checking account stays protected.