Benefits of Prepaid Credit Cards for Businesses
Credit cards have always held a place in the business world – enabling businesses access to cash flow and making it possible for growth that maybe wouldn’t have been possible otherwise. They can also cripple a business before it gets off the ground, though, if the credit card debt builds faster than the business turns enough profit to pay for it.
Prepaid credit cards are becoming more popular with businesses for a number of reasons, and should be considered a viable strategy for growing a business. Some benefits of prepaid credit cards for businesses include:
Budgeting – when you use a traditional credit card, it becomes much easier to spend more than you planned. A credit card lets you go over budget, where as a prepaid credit card insists that you only spend the money you have allocated on the card to spend.
Employee Spending – prepaid cards issued to employees helps you keep tabs on employee spending and ensure you don’t fall victim to abuse of company credit cards like many other businesses have experienced in recent years. If you give employees cards with spending limits, you know the worse they can do is spend up to the maximum available on the card so you eliminate the risk of an employee causing cash flow problems through credit card abuse.
Convenience – a prepaid credit card offers all of the same conveniences as a traditional credit card as far as paying goes. You can use your prepaid card to reserve hotels, car rentals and flights, pay for the lunch you provide your meeting participants, swipe at the local Staples for your office supply purchases, or make purchases over the phone for business related expenses. You can get multiple cards to give to your key employees who need to make purchases on behalf of the company. Prepaid credit cards are far more convenient than managing a checking account, and eliminates the time to write checks.
Monthly Statements and Easy Record Keeping – if you make it a habit to use prepaid credit cards to handle all of your purchases and expenses on behalf of the business, you can see all of your company spending in one place each month. The itemized records of your card statement should make it easy to see how you are spending money, areas you could reduce spending to save money, and make it easier come tax time. Simply file your statements each month and refer to them as necessary. Some prepaid credit cards will send separate statements for every prepaid card on your account – so you can see at a glance what employees are paying for with each of their prepaid cards as well.
Online Account Management – with most prepaid credit cards for businesses, you’ll receive an area to log in and view your statements and transactions via the internet. From here you can probably set spending limits per employee card, require that only certain vendors can receive payment from employee cards to completely eliminate risk of the card being used elsewhere, and add more funds to your prepaid account as necessary.
Keeping your spending in check is vital to the success of your business. Using prepaid credit cards instead of traditional credit may give you the discipline you need to succeed without going into debt.
