How Prepaid Business Credit Cards Can Control Employee Expenses

Many business owners wonder whether they should get a prepaid business credit card or just a regular business credit card. They are presented with multiple options every single day from many different lenders and banks. With so many options, it is difficult to determine which one is your best option. A prepaid business card can have several advantages. Here are a few things to consider with prepaid business credit cards. 

Employee Expenses

As a business owner, you will undoubtedly have to deal with multiple employees. Depending on the type of business that you are in, you might need to provide them a way to handle their expenses. This is especially true if you employ outside sales personnel. They will be out of the office a lot and they will need a way to pay for things. Hotel rooms, food, gas, and other expenses may be necessary for them to properly do their job. You need to provide them a way to pay for these expenses. However, at the same time, you do not want to give them free reign to the point that you cannot control how much they spend. Therefore, you need to find a solution that works well for both parties. Most of the time, you will have two options to pay for your employee's expenses. You can get a prepaid business credit card or a traditional credit card. Let's look at how both of these products would work.

Traditional Credit Card

With a regular credit card, the employee basically has to control themselves. You are at their mercy as to how much they can spend. A credit card usually has a spending limit. However, this limit is usually well more than you want your employee to spend. Even if you fire an employee because they went crazy and spent several thousand dollars over a weekend, the bill for the purchases will still come. You will still be responsible to pay for their mistakes even if you get rid of them as an employee. Therefore, if you give your employees a credit card, there will always be an element of risk there. Even if it is one of your most valued employees that has the card, you never know what could happen. This makes it hard to plan ahead as a business owner as you do not know exactly what to expect.

Prepaid Business Credit Card

With a prepaid business credit card, the entire scenario is changed. You decide ahead of time how much you want to spend on your employee's expenses. You pay the money upfront to the credit card and they can use it wherever credit cards are accepted. The big difference is that they cannot spend past the amount of money that is on the card. It makes it much easier to plan ahead and control your employee expenses. You can actually set a budget and stick to it without having to rely on the honor system with your employees.


Improve Your Credit Score - Free Consultation