Prepaid Credit Cards for Business

Table of Contents

The best prepaid credit cards for business
Should I get a prepaid credit card for my business?
How do prepaid credit cards for business work?
How to use a prepaid credit card for business
Key considerations when you compare prepaid business credit cards
Pros and cons of prepaid business cards
Am I eligible for a prepaid credit card for business?
How to apply for a prepaid card for business
Alternatives to a prepaid card for business
Prepaid cards for business FAQs

If you’re looking for an employee expense card but don’t want to open a new line of credit with a business credit card, then a prepaid credit card could be the answer.

These cards are ideal for business owners who want to keep a close eye on their business outgoings and employee spending. You simply load up the cards in advance, and then you or your employees can use them like normal business credit or debit cards. If you want to save time and hassle on admin and spend management, prepaid cards could be great for your business.

The best prepaid credit cards for business

Generally speaking, prepaid cards are likely to be cheaper than business credit cards, with fewer fees and charges and no need to pay interest (since you’re not borrowing anything or going into debt).

The best prepaid cards are likely to be easy to apply for and convenient to manage, with low fees and plenty of insights and spending controls.

Some providers, like Wallester, offer prepaid cards as part of a range of business services – making it easy to manage everything to do with your company’s finances in one place. In this case, prepaid cards are available as part of a suite of integrated expense management tools.

Similarly, Soldo’s prepaid cards are available as part of a wider package of spend management solutions for your business. With Soldo’s cards, the emphasis is on decentralising your spend management processes and empowering your employees (with the right safeguards) to spend on the company’s behalf. The aim is to reduce the admin burden across your business and leave you with fewer expense management headaches.

Should I get a prepaid credit card for my business?

If you want a card which allows your employees to spend money on behalf of your business, then a prepaid card could be a good idea. Prepaid cards can be cheap and convenient, and they allow you to remain in full control of employee spending.

A key advantage of prepaid cards over conventional business credit cards is that prepaid cards don’t actually involve borrowing money or opening a line of credit – meaning you won’t have to worry about employees spending more than the pre-loaded value of the card.

Similarly, you won’t be charged interest on any purchases, and you won’t need to pass a credit check in order for your application to be approved.

How do prepaid credit cards for business work?

While they look like credit cards and work in much the same way, prepaid business cards don’t involve an open line of credit. In this regard, they have more in common with debit cards than credit cards.

As the name suggests, the cards have to be loaded with money before they can be used. Once a prepaid business credit card has been loaded, you or your employees can use the card to make purchases or ATM withdrawals like you’d use a normal Visa or Mastercard debit card. Wallester’s prepaid cards use the Visa payment network, while Soldo uses Mastercard.

You can’t use a prepaid credit card to borrow money or go into debt. You can only use them to spend money that has already been loaded onto the card, although you can add more money or top up the card at any time.

For this reason, prepaid cards are often used as expense cards. You can issue them to employees and use them to pay for things like employee travel, office supplies and team meetings without the hassle of applying for a conventional credit card.

How to use a prepaid credit card for business

Once you’ve found a prepaid card that could work for you and your business, you can apply directly with the card provider. If your application is accepted, you’ll receive a plastic card (or cards) in the post.

Before you or your employees can use the card, you’ll need to load it with some money. You can typically do this using your card provider’s website or app. Alternatively, you may be able to load your prepaid card using a bank transfer, BACS or PayPal. You can top up the balance of your prepaid business card whenever you want.

Typically, once a card has been loaded, it can be used anywhere that accepts debit cards: whether in shops, online, or at ATMs (although cards often come with a withdrawal limit). Bear in mind that there may be a few other restrictions on where a prepaid card can be used – like hire purchases and ongoing subscriptions.

Prepaid business cards can also be added to digital wallets to be used with Google or Apple Pay.

Cards can be issued to employees across your organisation, allowing you to control expenses by setting spending limits and spending alerts. You’ll also benefit from total visibility over how and where your employees are spending with employee spending insights and expense reports. You can check the balance of your prepaid business cards at any time online or using your card provider’s app.

Some prepaid cards can be used abroad, allowing you to load your card with sterling and then spend seamlessly in the local currency while you’re away on business. If you want a card that you can take with you on overseas business trips, make sure to choose a prepaid card that works wherever you’re going (or consider a dedicated business credit card for travel if you think it could be worthwhile).

Key considerations when you compare prepaid business credit cards

In terms of fees and features, prepaid business cards can vary from one provider to the next. When you compare prepaid cards for your business, consider the following:

Fees and charges: Prepaid cards are typically cheaper than credit cards. However, some prepaid cards charge for certain types of transactions and ATM withdrawals, and others have monthly rolling fees. You may also have to pay a fee every time you load the card.
Offers and rewards: Credit card providers sometimes have time-limited offers on their cards. Shop around with prepaid cards to see whether you could benefit from any introductory offers. However, unlike with business credit cards, prepaid cards typically won’t provide you with rewards – like cashback or points – for your business spending.
Spending controls: Since they’re great for using as employee expense cards, prepaid business cards tend to come with extensive spending controls. If these features are important to you, look for a prepaid card that allows you to set spending limits, monitor employee transactions and view spending insights to get a better sense of where your business’s money is being spent. With Soldo, for example, you can get text notifications to stay on top of employee spending and monitor the balance of your account.
Additional cards: For business owners with multiple employees, look for a card provider which can issue you with multiple prepaid cards linked to the same account. You may also be able to get cards issued with your company’s branding and logo – like with prepaid cards from Wallester.
Overseas use: If you want to use your prepaid card abroad, check in advance to make sure your card provider covers the relevant currencies and countries. Some prepaid cards can be loaded with sterling and then used to spend in other currencies.

Pros and cons of prepaid business cards

Advantages of prepaid business cards

Easy to apply: With no credit checks involved, the approval process for prepaid cards is easier than with business credit cards. Once you’ve received your card in the post, all you need to do is go online to load it with money.
Convenience for you and your employees: For your employees, paying for business expenses is easy, with prepaid cards typically accepted everywhere you can pay by card. For business owners, a prepaid card could help with staying on top of expense management. A prepaid expense card could also save you time on reconciliation and accounting.
Track employee spending: Prepaid business cards are great for managing employee spending. You, as the cardholder, will have visibility over employee spending and the ability to set spending limits and controls.
No credit check needed: You’re not borrowing any money with a prepaid card, so there’s no need for the credit history of your business to be checked.
Cheaper than credit cards: With no interest to pay and generally lower fees, prepaid cards can be a cheaper way to cover business expenses than a credit card.
Spend abroad: Some prepaid cards can be used abroad, saving you a currency-converting headache before any big business trips.

Disadvantages of prepaid business cards

Limited flexibility: In the absence of any credit facility, prepaid cards can’t be used to help with cash flow or to spread the cost of purchases. Only being able to spend what’s already on the card can be a good thing in some contexts, but it could constrain your business in others.
Can’t build your credit score: Responsibly using a conventional business credit card will normally boost your business credit score. With prepaid cards, there’s no effect on your business’s credit rating, which means you could lose out on the opportunity to build a strong credit history for your business.
Fees and charges: Prepaid business cards aren’t free, and you may end up paying a fee every time you spend, load the card or make an ATM withdrawal. These fees vary between providers, so make sure you shop around for the card that will work best for your business.
Fewer payment protections: While consumer credit cards benefit from extensive payment protections, prepaid credit cards for business generally lack the same robust safeguards.

Am I eligible for a prepaid credit card for business?

Because prepaid business cards don’t allow you to borrow money, you generally don’t need to pass a credit check before your business is approved for one.

For this reason, more businesses are likely to be eligible for prepaid business credit cards than conventional credit cards. Prepaid cards can be ideal for businesses with poor credit histories or start ups that haven’t been trading long enough to build up a strong business credit score.

How to apply for a prepaid card for business

The application process for prepaid business cards is generally quick and painless – especially compared to a conventional business credit card, where credit checks are involved.

Once you’ve compared prepaid cards and found the one which you think will be best for your business, you can apply online, directly with the card provider.

Alternatives to a prepaid card for business

If you want a credit card for your business but don’t think a prepaid card is the best option, then you could consider these alternatives:

Rewards business credit cards

If you want a card that rewards you for your regular business spending, then a rewards business credit card could be a good choice. With these cards, you can earn cashback or points, which can be redeemed for things like airline loyalty points or money off your next statement. Some rewards business credit cards come with additional free employee cards linked to the account of the main cardholder, so you can still use them for employee expenses.

Travel business credit cards

If work often takes you overseas, then a travel business credit card could save you money. Unlike many other cards, travel business credit cards typically don’t charge you extra for using your card abroad and making non-sterling transactions. That being said, some travel cards charge foreign exchange fees in some regions but are completely fee-free in others, so make sure the territories where you want to use the card are covered before you apply.

Purchase business credit cards

A standard business credit card could be a better fit for your company than a prepaid business card. With a credit card, you’ll borrow money from your provider, which means credit cards are a more flexible option than a prepaid card (where no borrowing is involved and the card must be pre-loaded with money before use). If used responsibly, a business credit card could also help you build your business credit score and may come with additional payment protections.

Business charge cards

Unlike a traditional credit card, charge cards must be paid off in full each month. Another difference is that charge cards don’t have a pre-set spending limit – instead, your limits will change as you use the card. If you use your charge card properly, you won’t have to pay interest on your purchases. Prepaid cards don’t charge interest either, as you’re not technically borrowing anything, but a charge card could be a better bet if you want a card that comes with perks and rewards.

Prepaid business cards are generally accepted everywhere you can use a debit card. This includes shops, websites and ATMs, where you can use prepaid cards to withdraw cash. Just know that you might be charged a fee for certain types of transactions, including ATM withdrawals.

Business expense cards, as the name suggests, are cards that employees can use to cover their business expenses. Employees can use expense cards to cover the cost of approved expenses in the same way they’d use a debit card. With expense cards, the bill eventually ends up with the business, which will usually have oversight and controls over employee spending. With prepaid employee expense cards, the business must load up any cards before they can be used by employees.

Prepaid business cards typically don’t come with rewards. If it’s rewards you’re after, a rewards business credit card could be a better bet. With certain business credit cards, you can benefit from cashback or accrue membership points as you spend. These points can then be redeemed for things like airline miles or money off your next statement.

Many businesses use prepaid cards as employee expense cards. You can check the balance of your prepaid card(s) at any time using your provider’s website or app, and you’ll generally be able to set your own spending controls. It’s also impossible for a card user to go into debt with a prepaid card or to spend more money than has already been loaded onto the card.

Prepaid business cards don’t benefit from the robust protections afforded to consumer credit cards. However, chargeback could help you recover money stolen from your card or taken in error.

Some prepaid business cards can be used overseas. In these cases, you can pre-load the card with sterling and then use the card to pay in the local currency while you’re abroad. Before you apply for a prepaid card, just check that the relevant countries are covered and make sure you understand any fees you might incur.

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