Pros and Cons of Prepaid Business Credit Cards

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If you’re the type of business owner who likes to keep a tight rein on the money in your company’s bank account, a prepaid business credit card might be right for you. These cards offer all the flexibility of a traditional credit card without any of the usual fees and restrictions that come with it. They’re great for improving your accounts payable process, as well as giving employees access to their salaries before they get paid by their employer. However, there are some downsides as well:

Pro: They’re an easy way to keep track of business expenses.

Prepaid cards are an easy way to keep track of business expenses. You can get a receipt for every transaction, which will make it easier for you to keep track of your spending. And if you use a spreadsheet or accounting software (like QuickBooks), it’s even easier!

If you’re going on vacation, and want some money in your pocket so that no one sees the receipt from the hotel room (or whatever), then this isn’t going to affect what happens with the card at all—just keep track of everything using whatever system works best for you. It doesn’t matter whether it’s prepaid or not; what matters is that people know where their cash went when they need it most!

Pro: You can use them for budgeting and as a cash flow management tool.

Prepaid business credit cards can be used for budgeting and as a cash flow management tool.

You can set a budget for your business, which will help you stay within the limits of that budget. If you’re spending too much money on something like rent or marketing, then this will give you some control over it. You’ll see how much money you have left in your account and how much is coming in each month so that if there’s an emergency (like an illness), it won’t affect the business as much because they won’t need any extra money until their next paycheck!

Con: You can’t dispute charges or get chargebacks or returns.

While the card is in your possession, you can’t dispute charges or get chargebacks or returns. If the card is lost or stolen, then the company may not replace it. If you are unhappy with their service, there’s no way to dispute charges or get chargebacks or returns on your business credit card.

Con: Late fees and inactivity fees.

  • Con: Late fees and inactivity fees.

Late payment, or non-payment, can result in a late fee of as much as 39 percent of the unpaid balance. You’ll also be charged an inactivity fee if you don’t use your card within 6 months of opening it. These charges are per-month rates and may add up quickly if you’re using this credit card for an extended period of time—especially if you run into trouble paying off your balance each month.

Pro: They are good for employees if you don’t want to give company credit cards, but need to reimburse for business expenses.

Prepaid business credit cards are good for employees who you don’t want to give company credit cards to but need to reimburse for business expenses.

For example, if your employee is traveling with you and needs money in order to pay for their hotel rooms or meals while they’re on the road with you. Or maybe they have an office at home but still need some cash flow management tools because they have different jobs than your other employees who work in their own offices.

If this sounds like something that would work well for your business, then consider getting a prepaid business credit card!

Pro: No credit checks, no interest rates, no minimum payments, no late fees, and no damage to your personal credit score.

The first and most obvious benefit of using a prepaid card is that you don’t have to worry about any of these things. You don’t need to pay interest on your credit card, because it’s not like any money was stolen from you. Your payments are always paid up in full every month, so there is no chance of late fees or damage to your personal credit score (although some people still try).

The second benefit is that there are no additional charges involved with using this type of payment method — no annual fees, no application fee, and no foreign transaction fee! This means businesses can offer their customers more products at lower prices than they would otherwise be able to offer without charging these extra fees themselves.

Pro: You can improve your company’s accounts payable process.

Prepaid business credit cards are ideal for improving your company’s accounts payable process. You can use them to track expenses and authorize purchases, as well as manage reimbursement.

So, how do you get started? Here are some tips:

  • Make sure you have a good system for tracking expenses. If your organization doesn’t have an established expense tracking system in place, now is the time to start one! A good expense tracker should have all kinds of customizable inputs (like an employee’s name) and outputs (what was purchased). You might also want it to show who authorized each purchase or refunded the money after it was approved by management; this will help eliminate any misunderstandings about who made what decision at which point in time. Make sure everyone knows what their responsibilities are when using prepaid business cards so there aren’t any surprises later down the road when trying

Con: Lack of flexibility in credit limits.

One of the more frustrating aspects of prepaid business credit cards is that you can’t increase your credit limit. If you want to get a new card or replace an old one, you may be able to do so if it’s just a temporary situation. However, if your business needs more or less money than what’s currently on its account at any given time—say, if sales are down and profits are down—you’re stuck with whatever amount that is until those things change again.

This isn’t necessarily bad news for consumers; it just means that prepaid business cards won’t always be perfect for everyone who wants one (or even some people).

Pro: No debt collection calls.

One of the best things about prepaid business credit cards is that they don’t report to credit agencies. This means you can keep your good name and reputation intact, even if you run up big debts or make mistakes with billing. A business credit card also protects against lawsuits from customers or vendors, which could lead to garnishment of wages and damage in the form of bad reviews online.

Con: Inability to purchase things online (unless it’s a virtual card).

In some cases, you may find yourself unable to make purchases online if your business doesn’t offer a physical card. This is due to the fact that many businesses don’t want their customers using their own accounts for this purpose. If you’re using a virtual credit card linked with an existing bank account, however, this problem is avoided because it’s not as convenient as carrying around cash in hand or waiting until payday before making purchases online. The prepaid nature also means that there are no fees involved when purchasing goods and services with this method of payment; however, there may be additional costs associated with paying by check (such as postage) or sending money via wire transfer instead of paying via PayPal or Dwolla directly from within the app itself which would take less time overall compared with mailing checks back home again after receiving them at the first place where ever we live now too!

Con: Separate accounting system is needed if you have a lot of transactions each month (software is available).

It’s possible to track your expenses using a spreadsheet or other software, but this could get complicated if you have a lot of transactions each month. If you want to use an app that is dedicated specifically to business credit cards and the like, there are several options available. The most popular one is called Expensify by Expensify Inc., which can be downloaded onto your mobile device (or desktop) and allows users to scan receipts into their system manually or automatically using facial recognition technology—the latter option being ideal if you don’t have time in your day anymore!

If you’re disciplined and want your business finances separated from your personal finances, prepaid business credit cards can be a good option for your company.

If you’re disciplined and want your business finances separated from your personal finances, prepaid business credit cards can be a good option for your company.

If you have a separate accounting system in place and are aware of the fees involved with prepaid credit cards (and any other type of account), then this is a great way to keep track of expenses while keeping them separate from personal spending.


The pros and cons of prepaid business credit cards are heavily weighted in favor of the card. They’re easy to use and they take care of all your transactions, while still helping you keep track of your expenses. The main drawbacks to using one are the lack of flexibility with credit limits and late fees if there’s too much activity on the account each month. However, if that’s not an issue for you then this is definitely one way to manage your company finances without having access to other forms such as cash advances or loans from banks!