All small business owners need a business credit card. If you have poor credit, a traditional business credit card can help you build business credit.
Prepaid business credit cards are different than secured cards and debit cards.
A secured card is set up as a “regular” credit card, but you must fund it. You should only spend money up to the amount you fund, and you must put money back as you spend with secured cards. If you go over the credit limit, you’ll be making payments plus interest payments.
A debit card acts like a prepaid debit card, but unlike prepaid cards, it is linked to a bank account. You use the card, and unlike credit cards, the monies are deducted from your account. In that sense, they are prepaid business debit cards.
Why do small business owners choose to use business prepaid cards?
What is a Prepaid Business Credit Card?
With a prepaid card, you put money on the card. The card issuer doesn’t give you a set amount of money that you must supply to fund the card – that’s up to you.
You can use the card for purchases, up to the amount of money you have prepaid. In most cases, there is no activation fee.
Why You Should Consider Prepaid Credit Cards for Your Business
You should know that using prepaid credit cards won’t help you build credit like standard small business credit cards. Usage of prepaid credit cards isn’t reported to the consumer credit bureaus.
Use of a secured credit card is. Secured credit card companies supply that information to consumer credit bureaus. Use of debit cards is also part of your financial institution records, as debit card usage shows up as deductions from your business checking account. If you are asking yourself what are business credit cards or why should I get a business credit card, make sure to get well informed before you get one.
So why use a prepaid card?
No Need to Open a Bank Account
The card has an account number and routing number. You can transfer money to the card using direct deposit, PayPal account, ACH or wire transfer. There is no credit report, credit history or credit check.
No Overdraft Fees/Spending limits
When you run out of money on prepaid cards, you’re out. That makes prepaid cards a good choice for employers who want to control employee spending. You can limit spending amounts for each card.
No Money Limitations by Credit Scores
You can put as little or as much money as you’d like on prepaid cards.
If someone nabs your debit cards, there’s a chance that person can make purchases or cash withdrawals with funds in bank accounts.
With a prepaid card, a business owner can easily fund with small amounts. That way there will be a limit on how much money someone can access using the prepaid card, which provides financial protection.
6 Best Prepaid Credit Card for Business
You may be surprised and pleased to learn that prepaid credit cards may be linked to a business service provider which provides an array of services.
Most have minimal fees, and you can use them like a free checking account in most cases. For example, the Bento for Business prepaid business card links to a spending management platform.
There are many different types of credit cards, so make sure to always search for the best options for your particular case.
1. Bento for Business Prepaid card
Features: The Bento for Business credit card links to a spending management platform. The employer can track receipts and expenses, and export to an accounting management platform such as Quick Books or Zoho Expense. The employer can issue cards to employees, and then reimburse employees for expenditures and/or refund their cards with spending limits set individually.
Fees: Monthly fees depend on the number of cards you want ($29 up to 10, $69 up to 25, $149 up to 100). Free trial period.
Features: The Mesh card is loved by CFOs, especially CFOs overseeing a small business with lots of employees and regular business expenditures. You’ll get 1.5% cashback on business expenditures, and automatic receipt matching to expense reports. Businesses can load up to $20,000 per card up to a $10 million total balance on all Mesh cards.
Fees: There is no monthly fee but there is a fee for international transactions (varies by dollar amount).
3. Discover Global Network
Features: The Discover Global Network features choices among several types of innovative prepaid programs, which the business owner can customize. Using a global payments network, the business owner can tap and pay, pay online or make purchases through the card’s App.
Fees: The fee varies by transaction amount. No additional foreign transaction fee for purchases made from member companies of the Discover Global Network.
4. Brink’s Prepaid Mastercard
Features: With the Brinks card, you can set up a scheduled direct deposit from your checking or savings account to refund the card. This prepaid Mastercard has an easy-to-use App and anytime alerts for low balances on cards. The best feature is the choice of how to pay fees.
Fees: You can choose to pay a monthly fee of $9.95 or choose Pay as You Go fees ($1.50 per transaction).
5. Netspend VISA Prepaid Cards
Features: The Netspend card allows direct deposits from a wide variety of sources, a mobile App, cash back at select merchants, and mobile check deposits. You can customize the card with a business logo or chosen image.
Fees: If you enroll in a $500 guaranteed direct deposit, you’ll get the fee advantage plan (no fees, not even an annual fee). Otherwise, you’ll choose from $9.95 monthly fees or fees for use (such as $1.50 per purchase, $2.95 for ATM withdrawal fees, and $3.95 fee to load money).
6. Blue Bird American Express
Features: With the Blue Bird American Express, you can add cash at WalMarts and make fee-free cash withdrawals there. Convenient money transfers and free to use to pay bills using online bill pay. You can buy and fund these cards at WalMarts, Walmart fuel stations and other outlets.
Fees: No ATM withdrawal fee (in a large network). No monthly fee. Free to add cash.
What is the difference between prepaid debit cards and prepaid credit cards?
You load money onto a prepaid credit card.
Your bank account “holds” the money for your “prepaid” business debit card. The debit cards are linked to a bank account.
What companies offer prepaid credit cards?
You may easily get a prepaid card from companies you already use for business:
Paypal Prepaid Mastercard – The Paypal prepaid Mastercard is one of the best-prepaid credit cards because it is so easy to fund. You simply move money from your PayPal business account to the card. If you need cash, you can make ATM withdrawals using the card.
You can also look at the Walmart Money Card, of course, available at any Walmart.
The Dash prepaid Mastercard is a top choice to use to fund and figure payroll. You can load information about employees and payroll taxes onto the dash prepaid Mastercard, and pay employees onto their Dash cards.
Does SBA accept prepaid cards?
No. You can’t use a prepaid card to apply for an SBA loan. And remember that using a prepaid credit card will not improve your credit scores.
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