Prepaid business credit cards allow business owners to preload funds on to employee cards and track employee expenses. Prepaid business cards allow you to both set daily limits on how much employees spend and restrictions on what they can purchase with the card. They typically carry monthly card fees between $0 and $10.
They are ideal for small businesses with cash on hand to fund their accounts and no need to build credit. Companies like Bento for Business offer affordable business prepaid cards for small businesses. You can load funds, set card spend limits, and lock or unlock employee cards with one click. Apply today and receive your first two cards for free.
How Prepaid Business Credit Cards Work
Prepaid business credit cards work like a combination of a business credit card and a checking account. Instead of borrowing money from the bank, business owners load funds onto their account and issue employee cards. Because you’re loading your own funds, there is no additional interest added to purchases like with a traditional credit card.
Business prepaid cards are best for business owners who want to issue employee cards or can’t qualify for a traditional business credit card. Compared to a business credit card, there are fewer qualifications, and the owner’s risk is limited because they’re not borrowing money. Once approved, business owners typically receive their cards within seven to 10 days. Business prepaid cards can be used anywhere that accepts major credit cards like Visa or Mastercard.
Next, business owners can issue additional employee cards and begin to control employee spending. To control employee expenses, business owners can set daily and expense category spending restrictions. Additionally, you can turn employee cards on or off with one click, giving you better control of their spending.
Prepaid Business Credit Cards Providers
There are four important criteria when evaluating the best business prepaid cards, which include cost, features, scalability, and liability. Even more, prepaid business cards offer cost tiers depending on how many cards a business owner issues. When deciding on a provider, it’s important to consider how much the cards cost and how many employee cards you can issue.
Top Prepaid Business Credit Cards Providers
|Small business owners looking for a free business prepaid card|
|Netspend||Business owners who need no more than 10 prepaid cards|
|PEX||Large or growing business with a need for scalability|
Some of the top prepaid business credit cards providers are Bento for Business, Netspend, and PEX.
1. Bento for Business
We recommend Bento for Business as the best prepaid business credit card because businesses get the first two cards for free. Plus, it’s one of the most affordable options for businesses needing 11 to 25 cards, as the monthly card cost can be as low as $2.76. It requires a minimum opening deposit of $10, but no minimum balance requirement or maximum account limit. You can spend up to $25,000 per card, per day.
Netspend is a good option for businesses needing 10 or fewer cards. Monthly card fees start at $9.95 for the first card and $1.95 for each additional card up to 10 cards. Netspend has no minimum balance requirement compared to Bento’s $10 opening deposit requirement. Business owners can load up to $25,000 to their account daily and employees can spend up to $5,000 per day.
PEX is right for large or growing business seeking scalability. It offers 100 or more employee cards per account, however, for a one-time setup fee of $49.95 and a monthly fee as much as $200. There is no per-card minimum balance requirement, although you must have at least $50 in your PEX account at all times. Plus, this prepaid card has no daily load limit, and you can spend an unlimited amount per card daily.
Who Prepaid Business Credit Cards Are Right For
Prepaid business credit cards are designed for business owners who can’t qualify for or don’t want a traditional small business credit card. They’re best for business owners with low personal credit scores, who want to avoid personal liability, and who want to issue employee cards to control spending. If you fall into these categories, a business prepaid card can be a handy way to give your employees access to company funds for business-related expenses.
Business prepaid cards are best for:
- Business owners with low credit scores: Prepaid credit cards require fewer qualifications compared to small business credit cards; if you can’t qualify for a traditional business credit card, this is an excellent option for you; some of the best business prepaid cards don’t require a credit check at all
- Business owners who want to avoid personal liability: Since you must use cash-on-hand to fund your account, business owner liability is limited to the amount of preloaded cash; in comparison, business credit cards typically require a personal guarantee because you’re essentially borrowing money with every purchase; this means if your business fails to repay its debt, you become personally liable
- Businesses that want to issue employee cards: One of the best features of a business prepaid card is the ability to set and control employee spending; by issuing employee cards, you can set daily or expense category spend restrictions and lock or unlock an employee’s card with one click through the prepaid card portal
Overall, business prepaid credit cards are a great way to get company funds in the hands of your employees without having to borrow money from the bank. This not only protects you as the owner but can also promote controlled spending habits. Even more, business prepaid credit cards are also an excellent inexpensive business card option.
Prepaid Business Credit Cards Costs
Most business prepaid cards have a monthly fee between $0 and $10 per card, depending on the prepaid card provider. Additionally, some, but not all, providers require a one-time account setup fee of up to $50. Plus, if you use your business prepaid card at a domestic ATM, it can cost up to $2.50 per transaction.
The typical costs of prepaid business credit cards are:
- Monthly fee: $0 to $10 per card
- Setup fee: $0 to $50
- Domestic ATM fee: $0 to $2.50
Compared to small business credit cards, which have annual fees between $0 to more than $500, prepaid business cards can be a cost-effective way to let employees use business funds. There are some providers offering cards with no monthly fees like Bento for Business, which gives business owners their first two cards for free.
Prepaid Business Credit Cards Requirements
Typically, prepaid business credit cards don’t have a minimum balance requirement. However, there are a few business prepaid cards that require you to maintain a balance of at least $50. Business prepaid cards also generally have a daily load, daily spend, and account balance limits that can’t exceed $25,000 per card.
The common requirements of a business prepaid card are:
- Minimum balance: $0 to $50
- Maximum balance: $25,000
- Daily load limit: $15,000 to $25,000
- Daily spend limit: $5,000 to $25,000
Prepaid business credit card providers may set daily load and spend limits to protect your company from fraud. If you think you’ll need to spend more than $25,000 per day and have a personal credit score of at least 640, a small business credit card would be a better option. If this is the case, you can shop and compare business credit cards through our credit card marketplace to help find the right card.
Prepaid Business Credit Cards Additional Features
Most prepaid business credit cards provide additional features that may help increase the cards’ value. Some of the most common additional features include setting spending restrictions, accounting software integration, real-time expense monitoring, automatic card reloads, and expense reporting.
The additional features that prepaid business credit cards generally offer are:
- Spending restriction functionality: You can set daily or category restrictions and reject purchases based on your restrictions; these restrictions don’t require human intervention to trigger them; once you set them, the restrictions happen automatically
- Accounting software integration: Most prepaid cards allow business owners to sync their prepaid accounts with their accounting software; this means your transaction data will be automatically transferred to your accounting system; if a prepaid card doesn’t offer this, you will still be able to export your transaction data to comma-separated values (CSV) or Excel files
- Real-time expense monitoring: You can see where your money is going and who is spending it easily; real-time monitoring lets you quickly track all cards and their transactions as well as turn off cards if you identify suspicious, unusual, or unauthorized transactions
- Automatic card reloads: Most prepaid cards allow business owners to set up automatic reload to ensure their cards never run out of funds; you can set up automatic reloads through an automated clearing house (ACH) or bank wire; this helps to ensure your cards won’t run out of funds
- Efficient expense reporting: Employees or cardholders can upload receipts for any transaction through the prepaid business card portal; this helps improve expensive reporting efficiencies
Some prepaid cards also come with benefits most commonly seen on small business credit cards. For example, Bento for Business offers auto rental collision damage waiver, purchase protection, and real-time sync with QuickBooks or other accounting software. These types of features give you, your company, and employees more protection when using your prepaid card.
How to Get Business Prepaid Cards
Getting business prepaid cards is quick and easy compared to the process of getting a small business credit card. There are four important steps you need to follow, which include choosing the best provider, researching the costs, applying for a card, and loading funds into your account. Generally, no credit check is required, and approval is immediate.
Four important steps to get a business prepaid card are:
- Choose the best provider: When choosing the best business prepaid card, you should consider the price, features, and the number of employee cards you can issue. The best prepaid business credit cards generally offer cost tiers based on the number of employee cards issued.
- Research the costs: Costs can be a huge part of deciding on your provider. Prepaid card providers either charge a monthly card fee or monthly account fee. The best prepaid business credit cards offer cards as low as $2.76 per card.
- Apply for a card: Once you’ve decided on a provider, you can apply online. Providers require basic business and personal information about your business and its owners. Once verified, you may be approved instantly. You’ll receive your first prepaid business card within seven to 10 business days.
- Load funds into your account: Once you’re approved, you can load funds into your account. It usually takes two to three days for the initial funds to hit your account. You can also set up automatic reloads with ACH or wire transfer for your peace of mind.
Once you have your cards and your account is loaded, you’re all set to set spending restrictions and lock or unlock employee cards. Getting a prepaid business card is not much different than getting a business credit card. The primary difference is that it’s much easier to qualify for a prepaid card. Manage your workforce’s spending with prepaid cards from Bento for Business and get your first two cards free.
How to Use Prepaid Business Credit Cards
It’s important to review the most important additional features and how you can use them to your advantage. To get the most benefit from prepaid business cards, it’s important to learn how to set employee card spending restrictions, lock or unlock individual cards, view all of your account activity, and integrate your account with leading accounting software.
1. Set Employee Spending Restrictions
One of the biggest benefits to business prepaid cards is the ability to set specific card restrictions for each of your employees. Most prepaid card providers allow you to control employee expenses by choosing how each card can be used. This means employees will be restricted to daily spend limits or can only purchase items within approved spending categories.
As an example, Bento for Business allows you to set daily spend limits, on which days of the week the card can be used, and spending category restrictions. You can also turn specific restrictions off if you don’t need to use all of them.
Bento for Business gives you the following controls when setting spending restrictions:
2. Lock or Unlock Employee Cards
Business prepaid cards allow you to lock or unlock employee cards with a single click from your account’s portal. Turning employee cards off or on can help protect you from fraud and misuse. For example, if you notice employees are using their cards irresponsibly, you can lock their cards to stop them from making any more unusual transactions.
Locking or unlocking employee cards is an excellent alternative for managing petty cash. Bento for Business gives you the control to set pre-approved spending limits and purchase categories. You can receive alerts for unauthorized spending and employees can upload petty cash receipts through the mobile app.
Bento for Business allows you to control employee cards through the following portal view:
3. View Account Activity
Some of the best business prepaid cards provide you with an interactive dashboard that gives a high-level view of your account activity. Typically, you can see how much money is being spent overall across your entire account. Plus, you can also view how much money each employee is spending and in which spending categories.
For example, Bento for Business allows you to see where your money is going and who is spending it quickly. You can create customizable alerts and have access to real-time interactive dashboards that let you track employee expenses quickly. Overall, its dashboard allows you to control your budgets easily and manage your funds on the fly.
Bento for Business provides business owners with the following interactivity activity dashboard:
4. Integrate With Accounting Software
Some prepaid business credit cards give you the ability to integrate your transaction data automatically with your accounting software, such as QuickBooks. This is beneficial because it streamlines expense reporting and saves you time from tracking down receipts or expense reports. You can also export your transaction data as a CSV or Excel sheet.
Bento for Business allows you to connect your account to QuickBooks with one click:
Pros & Cons of Business Prepaid Cards
Business prepaid cards can be an excellent way to give employees access to company funds for business-related expenses. Plus, you’ll have the ability to control employee spending and keep your business expenses under control. However, you can’t build your business credit, or you need to have cash-on-hand since the funds aren’t borrowed.
Pros of Business Prepaid Cards
The pros of business prepaid cards are:
- No credit check required for approval: Prepaid business cards don’t require a credit check for approval; since funds must come from your cash-on-hand, and not from a bank, it’s easy to get approved
- Control employee spending: Business owners can set daily or category specific spending controls on individual employee cards; additionally, you can lock or unlock cards through your prepaid card dashboard
- You can keep expenses under control: Prepaid cards help keep your expenses under control because you’re not borrowing money from the bank; therefore, you can only spend the amount of cash you have on hand; you don’t have to worry about using too much of your credit limit
Overall, business prepaid cards can be extremely beneficial to a number of businesses. We interviewed Shuyi Shang, marketing manager at Bento for Business, and she touched on how prepaid cards can be advantageous to business owners looking to take control of their finances and employee expenses. She said:
“Sometimes, it’s easy to focus on the top line and forget about the bottom line, but both are extremely important for the survival of any business. To optimize your bottom line, you need to take control of your expenses. This is where prepaid business cards can be helpful — prompting you to plan your budgets carefully and avoid overspending — especially when you can add controls down to day, amount, and spend categories. You will feel confident about your finances and find more time and energy to work on expanding your business the way you envisioned.
“The second benefit is employee satisfaction. Believe it or not, truly good employees will appreciate the added controls you bring to their expense process. They wouldn’t need to stress about paying out of their own pocket or working around the whole reimbursement process. More control means less guesswork, which makes their tasks more productive and predictable. They should feel empowered to do what they need to do and buy what they need to buy to get their job done. It’s a win-win for everyone!”
— Shuyi Shang, Marketing Manager, Bento for Business
Overall, prepaid business cards can promote good budgeting habits and help avoid overspending. However, when considering a business prepaid card, it’s important to understand any drawbacks that come with them. This can help you avoid running into any issues or difficult situations down the road.
Cons of Business Prepaid Cards
The negatives of business prepaid cards are:
- You need to fund the card with cash: To use a prepaid business card successfully, you must have cash-on-hand because the funds must be preloaded; in comparison, a small business credit card allows you to borrow money from the bank through an approved credit limit
- You can’t earn cash back or travel rewards: Prepaid business credit cards don’t offer any type of cash back or travel rewards; if you’re looking to earn rewards, consider a small business credit card; you can shop and compare the best credit cards through our credit card marketplace
- There are still fees associated with the account: Although prepaid business cards don’t carry interest rates, they still carry some fees; for example, there are sometimes fees for setting up the card, ATM usage, and to maintain each card and your account
Business prepaid cards can be a safe and easy way to get company funds in the hands of your employees. You can avoid the credit check that comes with a traditional business credit card and keep your business expenses completely under your control by using preloaded funds.
Comparing Prepaid Business Credit Cards to Alternatives
It’s important not to confuse prepaid business credit cards with alternatives, such as business secured credit cards, small business credit cards, and corporate credit cards. Some of the most common differences include fees, interest rates, repayment terms, and qualification requirements.
When comparing business prepaid cards to other options, there are several common alternatives.
Business Prepaid Cards vs Business Secured Credit Cards
Unlike business prepaid cards, business secured credit cards carry interest rates up to 20% and offer cash back or points rewards. In comparison to loading funds onto a prepaid card, business secured cards require you to put down a cash deposit, which serves as your credit limit. Although business secured credit cards require a personal credit check, unlike business prepaid cards, they’re an excellent option if you have a low personal credit score.
Business secured credit cards are best for business owners that want to avoid high fees and have personal credit scores below 579. A business secured credit card would be a better option than a prepaid business card if you don’t want to have to continually preload funds for your employees to use.
Business Prepaid Cards vs Small Business Credit Cards
Compared to business prepaid cards, small business credit cards carry interest starting at 14%, have more expensive card fees, are repaid monthly, and require a personal credit check. Instead of preloading funds like a prepaid business card, you can be approved for a credit limit that allows you to borrow money from the bank. However, both options allow you to issue employee cards.
Small business credit cards are an excellent way to access necessary financing if your credit score is 640 or higher. The best small business credit cards offer introductory bonuses, high rewards payouts, specific rewards categories, and low introductory and ongoing interest rates. The best card for you is likely determined by your specific personal and business situation, including the type of rewards you’re seeking.
Business Prepaid Cards vs Corporate Credit Cards
Compared to business prepaid cards, corporate credit cards have an annual cost between $0 to $100 or more and act as a charge card. Charge cards carry no interest because they’re required to be paid in full every month. Corporate credit cards may also offer similar additional features, such as spending restrictions and interactive activity dashboards.
Corporate credit cards are best for businesses that have $4 million or more in annual revenue and $250,000 or more in annual credit card expenses. Business prepaid cards and corporate credit cards are typically given to employees to pay for business-related expenses, such as travel. Employee cards are issued to employees for use on behalf of the company.
Frequently Asked Questions (FAQs) About Business Prepaid Cards
We covered a lot of information regarding business prepaid cards, who they are best for, and some of the top providers. There are some questions that are asked more often than others, and we address those here. If you have any other unanswered questions, please feel free to share them in the Fit Small Business forum or leave a comment below, and we’ll provide an answer.
Can I Build Credit With a Prepaid Card?
Similar to business secured credit cards, prepaid business cards help build credit by letting you make everyday purchases and establish good spending habits that your providers report to the main credit reporting bureaus. They also build credit indirectly by helping you make better spending decisions with other payment methods.
Can I Get a Business Credit Card With Bad Credit?
If you have a personal credit score below 670, your business credit card approval chances are slim. However, your best bet is to apply for a business credit card for fair credit. Fair credit business credit cards are best for personal credit scores below 670 and offer competitive APRs.
Who Are Business Prepaid Cards Best For?
Business prepaid cards are best for business owners who are looking to issue employee cards or can’t qualify for a small business credit card. Additionally, they’re also an excellent choice for business owners who want to avoid any personal liability. Overall, they’re a handy way to get company funds in the hands of your employees.
Prepaid business credit cards are an easy way for business owners to get company funds in the hands of their employees. Plus, they have fewer qualifications compared to a traditional business credit card and limit the owner’s risk. You can control employee expenses by setting spending restrictions and locking or unlocking individual cards.
Some business prepaid card providers offer cards with minimal fees. Bento for Business, for example, gives you your first two cards for free. Plus, you can sync your account with your accounting software and track your expenses easily. Apply today and receive instant approval.