A purchasing card, also called a P-Card, is a charge card but is used to procure goods and services from merchants without other payment methods, such as checks and automated clearing house (ACH) transactions. How you plan to use a P-Card, its costs, potential benefits, and qualification requirements likely determine the best P-Card for you.
Top 5 P-Cards December 2019
P Card Options | Best for |
|---|---|
(Best overall) Earning rewards on eligible business purchases | |
Consolidating your company spending and business-related expenses onto one card | |
Operating a business with at least $4 million in annual revenue | |
Expert analysis on their programs and recommended strategies | |
An alternative for easier requirements and abilities to manage employee spending |
What Is a Purchasing Card?
A purchasing card is a charge card that falls into the commercial card family, which also includes corporate cards. You’ll find that a P-Card works just like a corporate card, except it’s specifically focused on business-to-business purchasing, rather than paying for travel, entertainment, and meals. Some card providers have all-in-one purchasing card and corporate card options, which allows you to do both things.
A charge card is required to be paid in full monthly and generally has terms that are net 30. This means your credit card bill is due in full at least every 30 days. Unlike business credit cards, charge cards don’t carry any annual percentage rates (APRs) and can’t carry balances month-over-month. Instead, unpaid balances that remain after the month’s end incur late fees and are considered past due.
P-Card vs Business Credit Card
The major difference between a P-card and business credit card is that a P-Card acts like a charge card, and a business credit card does not. The full balance on P-Cards must be paid in full every month while a business credit card can carry a balance month-over-month. Some of the other differences, including interest rates, repayment terms, discounts and rewards, and spending restrictions.
How We Evaluated Purchasing Cards
Business owners typically use purchasing cards to help streamline and simplify their purchasing process. Just like normal credit cards, purchasing cards have a wide range of costs, terms, and qualifications. How you plan to use a P-Card, its costs, potential benefits, and qualification requirements likely determine the right card for your business. Choose a business card that offers the features and perks you want to receive.
Based on the wants and needs of business owners, the criteria we used to evaluate the best P-Cards are:
- Costs: Costs including annual, card, and late fees; however, there is no APR because you have to pay the balance in full monthly
- Terms: You’ll be required to at least pay your balance in full monthly but, sometimes, more frequently if you need access to more funds that your limit wouldn’t allow if you only pay one time per month
- Rewards: Possible rewards and pay early discounts account holders can earn while using a P-Card
- Benefits: Whether the card offers account management tools or programs that deliver data reports
- Qualifications: Business credit score and business history that is required to qualify for a card
- Reviews: Both positive and negative user reviews sourced from the web about a specific card
Based on the above criteria, we recommend the One Card from Capital One as the best P-Card because of its versatility. It offers businesses with the best opportunity to maximize and earn rewards, gives them the option to choose between different billing cycles, and allows business owners to control employee spending.
One Card from Capital One: Overall Best P-Card for Small Businesses
The One Card from Capital One is the best P-Card because of the ability for businesses to earn and maximize rewards, streamline the purchasing process, and benefit from flexible billing options. Unlike the cards on our list, it does have a cardholder fee of $35 per card, and it’s both a purchasing card and a corporate card. If you use a corporate card, you should consider developing a corporate credit card policy to set expectations with card users.
One Card From Capital One Cost
The One Card from Capital One carries no interest since it’s a charge card, and any unpaid balances will result in a late fee. The major downside to this card is that it carries a $35 fee per card, unlike the rest of the cards on our list.
The costs of the One Card from Capital One are:
- Annual fee: $0
- Cardholder fee: $35 per card
- Late fee: 1.5% of the past due amount
- Cash advance: $5, or 5% of the amount of each advance, whichever is greater
What’s different about the Capital One card is that cardholders can use it for cash advances. This may be helpful for cardholders that need cash, but only have their business card handy to access company funds.
One Card From Capital One Terms
The One Card from Capital One works as a business charge card and has similar terms. All charges made on this card are due and payable when you receive your periodic statement, which is customizable for each account.
You have two billing options with this card:
- Flexible 14-day billing cycle: A shorter repayment period is good if you have more expenses in a month than your card limit would allow.
- Flexible 30-day billing cycle: If you don’t need access to more of your limit, a longer repayment period can help spread out expenses during the month. This may be an easier billing cycle if you don’t have the revenue two pay more than once a month.
Compared to the other purchasing cards, the Capital One card ranks best in this category as it’s the only card with flexible billing options. Another major benefit of the Capital One card is that, depending on the repayment terms you choose, you can receive rewards for your net purchases.
One Card From Capital One Rewards & Benefits
Although there are no introductory rewards like some small business credit cards, account holders can earn ongoing rewards. Depending on the billing cycle you select for your account, you can earn up to 1.5 times the rewards on net purchases. Rewards can be redeemed automatically or on-demand. For example, 10,000 points equal a $100 statement credit.
The ongoing rewards for the One Card from Capital One are:
- 1.25 times the rewards: Earn 1.25 times the rewards with a 30-day billing cycle
- 1.5 times the rewards: Earn 1.5 times the rewards with a 14-day billing cycle
Capital One also offers online management tools that can help account holders manage spending by supplier, schedule automated reports, receive expense reporting, and access up to 36 months of extended transaction information. You can connect your transactions quickly to your accounting software, such as QuickBooks and Quicken, to make your accounting process easy.
One Card From Capital One Qualifications
Most card providers have varying specific qualifications for each card inquiry. Some common qualifications include monthly and annual spend amounts, level of liquidity, business and personal credit score, level of cash flow coverage, and the financial condition of your business. Typically, they require your business to be profitable both currently and in the past couple of years.
Also, it’s always a good rule of thumb to maintain a “good” business credit score with the four business credit bureaus. The four business credit bureaus and what’s considered a good score include Dun & Bradstreet (80 and higher), Experian (76 and higher), Equifax (90 and higher), and FICO SBSS (140 and higher).
One Card From Capital One Is Missing
As our best P-Card, the One Card from Capital One isn’t missing much for small business owners. It’s a great option that offers rewards, cash flow flexibility, online management tools, employee cards, and real-time spend controls. However, the card’s downside is its per card fee.
One Card From Capital One Reviews
The One Card from Capital One has excellent reviews as account holders like that they can earn rewards while they streamline their purchasing process. This separates this card from the rest as it offers more opportunities to maximize rewards and provides extra cash flow flexibility. The only negative review we found was regarding its per-card fee.
How to Apply for The One Card From Capital One
To apply for the One Card from Capital One, you can schedule a call with one of their banking representatives online quickly. It’s common for purchasing card providers to require that you contact them first before applying. It can take up to 24 hours to be approved and seven to 10 days to receive your card in the mail.
WellsOne Commercial Card: Best for Consolidating Spending Onto One Card
The WellsOne Commercial Card is best for small businesses looking for a P-Card that can consolidate payables into a single card. Unlike other purchasing specific cards, this card can be used for purchasing, travel and entertainment, account payable invoices, and fleet expenditures. This card is a combination of a P-Card and a corporate card. Similar to the Capital One P-Card, the Wells Fargo card has no annual fee and is required to be paid in full monthly.
WellsOne Commercial Card Costs
The WellsOne Commercial Card doesn’t carry an annual or monthly fee. Typically, there will be annual fees for cards that offer rebates and rewards. Because this commercial card works like a charge card, any balances that are unpaid will be dinged with a late fee. If your business becomes habitually late on your payments, your provider may require automatic payments or potentially can cancel your card.
WellsOne Commercial Card Terms
WellsOne account holders are expected to repay their total account balance in full every month. Most providers will require you to pay at least once every 30 days. However, you may be able to be set up with more frequent repayment terms if you want them, or so you can spend more than your card limit would allow if you were on a 30-day payment cycle.
WellsOne Commercial Card Rewards & Benefits
The Wells Fargo P-Card doesn’t offer any rewards like some cash back and travel rewards credit cards. Although, it provides their cardholders and account holders with a handful of benefits through comprehensive reporting on the CEO Mobile app. Wells Fargo’s reporting helps you improve working capital, update your accounts payable system automatically, analyze spending trends easily, and deliver convenience to traveling employees through mobile access.
WellsOne Commercial Card Qualifications
You must reach out to a banking representative online to find out if you qualify for the WellsOne Commercial Card. However, some common qualifications with most providers include your monthly and annual credit card spend amounts, business and personal credit score, level of liquidity, and the financial standing of your business.
As a good rule of thumb, you should maintain a good business credit score―FICO SBSS score of 140 and higher―and a good personal credit score―640 and higher. Providers also want to see that your business has been profitable, and you have the cash flow to pay off your debt obligations.
What the WellsOne Commercial Card Is Missing
The WellsOne Commercial Card doesn’t offer any rewards for business-related purchases. If you’re a business that is looking to consolidate expenses onto one card alongside earning some rewards, it may be best to consider another option like Capital One.
WellsOne Commercial Card Reviews
Online customer reviews suggest that cardholders and account holders, especially like that this card can be used for more than just their purchasing needs. They like this flexibility, as it allows them to consolidate different expenses onto one card. There were no negative reviews online.
How to Apply for the WellsOne Commercial Card
To apply for a WellsOne Commercial Card, they require you to request to speak to a banking representative. You can get in contact with a representative through its website. It will typically take up to 24 hours to receive a decision. Once approved, you will receive your card within seven to 10 days.
American Express Purchasing Card: Best for Businesses With at Least $4 Million in Annual Revenue
The American Express Purchasing Card is the best P-Card for small businesses that have at least $4 million in annual revenue. With no annual fee, this card’s inexpensive costs are similar to the Wells Fargo P-Card. The American Express P-Card is right for business owners looking to have access to expense management programs and expense reporting to improve their working capital management.
American Express Purchasing Card Costs
The American Express P-Card comes with no annual fee. Although there is no APR, your account can be hit with a late fee if you fail to pay your monthly balance.
The costs you can expect with the American Express P-Card are:
- Annual fee: None
- Late fee: $39 or 2.99%, whichever is greater
Since purchasing cards act like charge cards, it’s expected that you repay your account balance in full every month. For any unpaid balances, your account will accrue a late fee of at least $39 compared to the 1.5% of the past due amount Capital One charges.
American Express Purchasing Card Terms
The American Express P-Card has monthly repayment terms that require you to pay your balance in full. It’s common for most P-Card providers to require you to pat at least once every month. Although there are sometimes opportunities to have more frequent repayment terms if you’d like. This can help if you want to spend more than what your card limit would allow for if you pay every 30 days.
Also, card providers may often require you to set up automatic payments. This can help you not miss any payments. However, you do need to be aware of your bill to make sure you don’t accidentally overdraft your connected checking account.
American Express Purchasing Card Rewards & Benefits
The American Express P-Card offers two expense programs that can help your small business control their purchasing process. These programs include the American Express @ Work Reporting and the ExpenseIt Pro from Concur App.
The American Express expense programs are:
- American Express @ Work Reporting: Allows for employees to create online reporting for their company’s P-Card program, allowing for simplified expense reporting
- ExpenseIt Pro from Concur app: Helps cardholders save time by uploading their purchase receipts immediately, which can connect with your business’s account system making for easy accounting
Other cards on our list may offer more lucrative additional features for some business owners. For example, you can earn ongoing rewards of up to 1.5 points through the Capital One P-Card.
American Express Purchasing Card Qualifications
Specifically, American Express qualifies you based on your annual revenues―operating budgets for nonprofits―and requires businesses to have at least $4 million in annual revenue. In comparison, most other P-Card providers will generally qualify you based on an annual spend requirement.
American Express also requires that your business is organized as a limited liability company (LLC) or corporation to qualify. Although there are no annual spend requirements needed to qualify for their P-Card, there are program features, such as liability, reporting options, control options, and travel and expenses (T&E) that might be tied to your level of annual spend.
What the American Express Purchasing Card Is Missing
The main downside to the American Express P-Card is that it’s only made available to growing small businesses that are bringing in a good chunk of annual revenue. It’s missing the lower qualifications that some other purchasing cards offer. A good alternative to consider would be the One Card from Capital One.
American Express Purchasing Card Reviews
Account holders like using this card because of the benefits and programs they receive alongside the card. The expense management programs allow them to take control of their traditional purchasing process, making it more efficient. However, the only negative reviews we found were concerning the annual revenue requirements.
How to Apply for the American Express Purchasing Card
You can get the American Express Purchasing Card by requesting a phone call through their website. Unfortunately, most purchasing card providers require that you submit a new card inquiry through an employee instead of being able to apply online. It can take up to 24 hours to receive a decision and another seven to 10 days to receive your card.
Citi Purchasing Card: Best for Comprehensive Control of Your Procurement Process
The Citi Purchasing Card offers robust spend controls and industry-leading merchant acceptance. The Citi Purchasing Card has no annual fee and is required to be paid in full monthly. It offers tools such as the CitiManager online tool and Citi Working Capital Analytics (CWCA) to help business owners gain control and visibility over decentralized buying decisions through in-depth analysis.
Citi Purchasing Card Costs
The Citi Purchasing Card has similar fees with the rest of the cards in our best P-Cards list. This purchasing card carries no annual fee or regular APR. Because it’s a charge card, your account will be hit with a late fee if your balance isn’t paid in full. Citi’s costs are customized to each business, which is very typical among most providers. You’ll need to contact a representative through their website for specifics.
Citi Purchasing Card Terms
The Citi Purchasing Card acts like a charge card and is required to be paid off in full monthly. Most providers require that you pay them at least once every 30 days. However, there may be other opportunities to agree to more frequent terms, such as 15 days. This can benefit you if you need to spend more money than your current limit provides.
Some card providers may have an automatic payment requirement to help mitigate the risk of late payments. If this is the case, be sure to keep an eye on your bill every month to avoid an overdraft on your connected business account.
Citi Purchasing Card Rewards & Benefits
Citi Purchasing Card account holders will receive benefits such as reporting, administrative, and online tools to help simplify its P-Card program. It offers tools that provide an in-depth analysis of your P-Card program, such as CitiManager and CWCA.
The account management tools Citi offers are:
- CitiManager online tool: Allows business owners to P-Card programs, set card spending restrictions, retrieve robust reporting, and modify any account parameters/
- CWCA: Provides an in-depth analysis of your P-Card program, pointing out opportunities to take advantage of your supply chain. Citi experts analyze your data to help recommend a payment-optimization strategy that best fits your business.
Similar to the American Express P-Card, Citi’s software, programs, and account management tools connect to your accounting software and expense management systems to simplify your business’s accounting needs.
Citi Purchasing Card Qualifications
Most P-Card providers typically have qualifications that vary per business looking to get a card. However, some of the qualifications you can expect include annual credit card spend amounts, business and personal credit score, level of liquidity, level of cash flow coverage, and the financial condition of your business.
Also, it’s always a good rule of thumb to maintain a “good” business credit score―FICO SBSS 140 and higher―and a good personal credit score―640 and higher. However, not all providers will require the business owner’s personal credit score. They will also want to see that your business is currently profitable and has been during the last couple of years.
What the Citi Purchasing Card Is Missing
The Citi Purchasing Card can only be used for business-to-business purchases. If you’re looking for a card to help you consolidate your company spending, it’s worth considering a card through Capital One or Wells Fargo.
Citi Purchasing Card Reviews
Online customer reviews suggest that most account holders like this purchasing card specifically for its robust card-level controls and the amount of data they receive in their reports. Additionally, cardholders and employees like this card because of the level of card acceptance. There were no negative customer reviews on the web.
How to Apply for the Citi Purchasing Card
To apply and inquire about the Citi Purchasing Card, you must contact a banking representative and provide your business information. To schedule a call with one of its representatives, you can use its contact form on its website. You can expect to receive a decision within 24 hours. Once approved, you will receive your card in the mail with seven to 10 days.
PEX Business Prepaid Card: Best Alternative to a Purchasing Card
The PEX Business Prepaid Card is the best alternative to a purchasing card because of the scalability it offers through 100 employee cards per account. It cost $7.50 per month for each card. However, this is waived if you spend $50,000 or more per month. This card is best for small business owners who want to control employee spending limits and don’t meet the spend qualifications of most P-Cards.
PEX Business Prepaid Card Costs
Most prepaid business cards have monthly card fees instead of annual fees. The PEX card charges a flat monthly fee of $7.50 per card and offers up to 100 or more cards per account. This is generally more expensive than a P-Card, but it’s an excellent option if your business doesn’t meet P-Card qualifications. For example, if your annual spend is too low.
The Pex Business Prepaid Card costs are:
- One-time setup fee: $49
- Monthly fee: $7.50 per card, waived after spending $50,000 or more
If you spend $50,000 or more per month across your account, PEX will waive all of your card fees. This makes it a great option for larger businesses. In addition to the monthly and one-time fees, PEX also charges 1.5% for all foreign transactions. However, there are no domestic transaction or load fees.
PEX Business Prepaid Card Terms
Prepaid business cards work much differently than normal credit cards and purchasing cards because the funds are preloaded. Therefore, there aren’t any specific repayment terms for the account holder to follow. The cardholders or employees can only use the amount of funds that are preloaded onto their cards. Once that amount runs out, you can add more funds to the card by transferring money through your online PEX account.
PEX Business Prepaid Card Rewards & Benefits
The PEX business prepaid card offers no rewards or discounts. However, with the PEX card, you can control company spending by setting employee card spending limits. Through an easy-to-use online portal, you can set specific spending privileges by department, individual cardholder, spending category, and time.
PEX Business Prepaid Card Qualifications
Compared to purchasing cards and normal credit cards, prepaid business cards have fewer qualifications. PEX doesn’t require a personal credit check or a personal guarantee from the business owner. However, PEX requires you to fill out your basic business and personal information and confirm your identity. It may also ask you to provide the information required to fund your PEX account from a business checking account.
What the PEX Business Prepaid Card Is Missing
With the PEX business prepaid card, small business owners won’t have the opportunity to save money on their purchase orders or earn rewards on their business-related purchases. If you’re looking to save money on these types of expenses, it’s worth considering a cash-back rewards credit card.
PEX Business Prepaid Card Reviews
PEX reviews are both positive and negative. A positive review suggests the fees associated with this card and customer support services are very beneficial to small business owners. Although, another customer says he’s experienced deposits that were withheld and failed transfers to his employee cards.
How to Apply for the PEX Business Prepaid Card
You can apply for a PEX Business Prepaid Card online in a matter of minutes and will need to provide your business information. It takes between one to three business days for approval and seven to 10 business days to receive your card.
Purchasing Card Alternatives
A purchasing card may not be right for small business owners if you’re looking to do more than simplify your purchasing process. If that’s the case for your business spending needs, it’s worth considering an alternative financing option. The most common alternatives to a P-Card are a small business credit card, prepaid business credit card, and secured business credit card.
Small Business Credit Card
Small business credit cards are an excellent way to solve your working capital needs, especially if you have little-to-no revenue. The best cards on the market offer cardholders various rewards and have low introductory and ongoing APRs. It’s possible to get a business credit card with a score of 670 or higher. However, we recommend having a score of 700 or higher if you want to qualify for the best cards.
Prepaid Business Card
Business prepaid cards can help your small business manage employee spending and typically have lower qualifications than a small business credit card. Some prepaid cards offer up to 100 employee cards, which can help you distribute your company funds easily. Although, it’s important to note these cards don’t have a revolving line of credit and the funds must be preloaded.
Secured Business Credit Card
Secured business credit cards are a great option for small business owners who may not qualify for a normal business credit card. There are card options on the market that offer financing to borrowers with personal credit scores below 640. Meanwhile, a secured business credit card is a great way to establish business and personal credit
Bottom Line
Purchasing cards help small businesses and organizations streamline their purchasing process, saving them time and money. A purchasing card can save account holders up to 90% of the normal purchasing process. Your current business financial situations and what you need to purchase likely determines the best P-Cards for you.
