Best Prepaid Business Credit Cards for Small Businesses

All small business owners should consider obtaining a business credit card. For those with poor credit, a traditional business credit card can be a valuable tool for building business credit.

Prepaid business credit cards are different than secured cards and debit cards.

A secured card is set up as a “regular” credit card, but you must fund it. You should only spend money up to the amount you fund, and you must put money back as you spend with secured cards. If you go over the credit limit, you’ll be making payments plus interest payments.

A debit card functions similarly to prepaid debit cards, but unlike those, it is connected to a bank account. When you use the card, funds are deducted directly from your account, unlike credit cards, which you borrow money from. Therefore, they can be considered prepaid business debit cards.

Why do small business owners choose to use business prepaid cards?

What is a Prepaid Business Credit Card?

With a prepaid card, you deposit money onto the card. The card issuer does not provide you with a predetermined amount that you are required to use to fund the card; instead, that decision is entirely up to you.

You can use the card for purchases, up to the amount of money you have prepaid. In most cases, there is no activation fee.

Why You Should Consider Prepaid Credit Cards for Your Business

You should know that using prepaid credit cards won’t help you build credit like standard small business credit cards. Usage of prepaid credit cards isn’t reported to the consumer credit bureaus.

Use of a secured credit card is. Secured credit card companies supply that information to consumer credit bureaus. The use of debit cards is also part of your financial institution records, as debit card usage shows up as a deduction from your business checking account. If you are asking yourself what business credit cards are or why you should get one, make sure to be well-informed before you get one.

So why use a prepaid card?

No Need to Open a Bank Account

The card has an account number and routing number. You can transfer money to the card using direct deposit, PayPal account, ACH or wire transfer. There is no credit report, credit history or credit check.

No Overdraft Fees/Spending limits

When you run out of money on prepaid cards, you’re out. That makes prepaid cards a good choice for employers who want to control employee spending. You can limit spending amounts for each card.

No Money Limitations by Credit Scores

You can put as little or as much money as you’d like on prepaid cards.

Fraud Protection

If someone nabs your debit cards, there’s a chance that person can make purchases or cash withdrawals with funds in bank accounts.

With a prepaid card, a business owner can easily fund with small amounts. That way, there will be a limit on how much money someone can access using the prepaid card, which provides financial protection.

Best Prepaid Credit Card for Business

You might be pleasantly surprised to discover that prepaid business credit cards can be connected to a business service provider that offers a wide range of services.

Most have minimal fees, and you can use them like a free checking account in most cases. For example, the Bento for Business prepaid business card links to a spending management platform.

There are many different types of credit cards, so make sure to always search for the best options for your particular case.

Bento for Business Prepaid card

Features: The Bento for Business credit card links to a spending management platform. The employer can track receipts and expenses, and export to an accounting management platform such as Quick Books or Zoho Expense. The employer can issue cards to employees, and then reimburse employees for expenditures and/or refund their cards with spending limits set individually.

Fees: The monthly fees for prepaid business credit cards vary based on the number of cards you choose: $29 for up to 10 cards, $69 for up to 25 cards, and $149 for up to 100 cards. There is also a free trial period available.

Mesh

Features: The Mesh card is loved by CFOs, especially CFOs overseeing a small business with lots of employees and regular business expenditures. You’ll get 1.5% cashback on business expenditures, and automatic receipt matching to expense reports. Businesses can load up to $20,000 per card and up to a total balance of $10 million on all Mesh cards.

Fees: There is no monthly fee, but there is a fee for international transactions (varies by dollar amount).

Discover Global Network

Features: The Discover Global Network offers a variety of innovative prepaid programs that business owners can tailor to their needs. With access to a global payments network, business owners can easily tap to pay, make online transactions, or shop using the card’s App.

Fees: The fee varies by transaction amount. No additional foreign transaction fee for purchases made from member companies of the Discover Global Network.

Brink’s Prepaid Mastercard

Features: With the Brinks card, you can set up a scheduled direct deposit from your checking or savings account to refund the card. This prepaid Mastercard has an easy-to-use App and anytime alerts for low balances on cards. The best feature is the option to pay fees.

Fees: You can choose to pay a monthly fee of $9.95 or choose Pay as You Go fees ($1.50 per transaction).

Netspend VISA Prepaid Cards

Features: The Netspend card allows direct deposits from a wide variety of sources, a mobile App, cash back at select merchants, and mobile check deposits. You can customize the card with a business logo or chosen image.

Fees: If you enroll in a $500 guaranteed direct deposit, you’ll get the fee advantage plan (no fees, not even an annual fee). Otherwise, you’ll choose from $9.95 monthly fees or fees for use (such as $1.50 per purchase, $2.95 for ATM withdrawal fees, and $3.95 fee to load money).

Blue Bird American Express

Features: The Blue Bird American Express allows you to add cash at Walmart locations and make fee-free cash withdrawals. It also offers convenient money transfers and is free to use for online bill payments. You can purchase and fund these cards at Walmart stores, Walmart fuel stations, and various other outlets.

Fees: No ATM withdrawal fee (in a large network). No monthly fee. Free to add cash.

What is the difference between prepaid debit cards and prepaid credit cards?

You load money onto a prepaid credit card.

Your bank account “holds” the money for your “prepaid” business debit card. The debit cards are linked to a bank account.

What companies offer prepaid credit cards?

You may easily get a prepaid card from companies you already use for business:

Paypal Prepaid Mastercard – The Paypal prepaid Mastercard is one of the best-prepaid credit cards because it is so easy to fund. You simply move money from your PayPal business account to the card. If you need cash, you can make ATM withdrawals using the card.

You can also look at the Walmart Money Card, of course, available at any Walmart.

The Dash prepaid Mastercard is a top choice to use to fund and figure payroll. You can load information about employees and payroll taxes onto the dash prepaid Mastercard, and pay employees onto their Dash cards.

Does SBA accept prepaid cards?

No. You can’t use a prepaid card to apply for an SBA loan. Remember that using a prepaid credit card will not improve your credit scores.

Image: Depositphotos

This article, "Best Prepaid Business Credit Cards for Small Businesses" was first published on Small Business Trends