As a small business owner, you need to have the flexibility to buy the items that your business needs and to make payments when they are due without dealing with costly and lengthy payment and approval processes. At the same time, you also need to manage your expenses. A business credit card answers these needs. However, many small businesses may have difficulty getting approved. Business debit cards may be a better option and have become more popular.
From 2007 to 2016, the number of debit cards in circulation increased from 434 million to 680 million. At the same time, transactions with prepaid cards increased by 19 percent between 2006 and 2012. Here are some business credit card answers to help you to determine which choice might be the best for your business.
Business credit card answers to questions: How do they work?
Business credit cards are credit cards that are specifically designed for businesses. Like other types of credit cards, business credit cards require credit checks. For businesses, both the business and the business owner will need to pass credit checks.
More business credit card answers: Once you are approved, charges that you make with the card are added to your balance. You may be charged interest on any balances that you carry. Some business credit cards carry high annual rates of interest, meaning that using them may add to your business’s debt.
Business credit card questions: What are the features of a business credit card?
One of the business credit card answers is that when you make a purchase with a business credit card, you can pay for it over time. However, the money that you spend from the card comes from a revolving line of credit that is linked to it.
Credit cards can be used to make purchases at almost any business. If you do not pay the balance off in full every month, you may have to pay a high rate of interest on your balance. Business credit cards are best used for convenience rather than to finance large purchases.
Business credit card answers: The difference between a business credit card and a business debit card
The best business credit card answers for your business may be for you to choose business debit cards instead. Unlike credit cards, debit cards are linked to your account so that you are spending your own money instead of adding to your business debt.
Since debit cards are not credit cards, your credit will not be checked for approval. Business debit cards also have 16-digit credit card numbers and can be used at any location that accepts credit or debit cards. When you purchase something with your business debit card, the purchase price will be subtracted from your account.
Business debit card questions: What should I look for when shopping for a business debit card?
Business debit cards may offer a variety of different features. When you are shopping for a business debit card, you should look for one that offers robust controls and expense management tools.
Bento for Business offers business debit cards that allow you to set strict spending limits. You can limit the spending on each card by the day, week or month. You can also restrict the categories of what each employee can purchase.
For example, you can set one card to only be used to purchase gasoline. Another card might be set to only be used to pay a specific vendor. This can help you to prevent fraud and to keep a tight lid on the spending that occurs at your company.
Business debit card answers to business debit card questions
The debit cards at Bento for Business let you see the balances that you have on each card from the convenience of your online dashboard. The cards are reloadable, and you can add to them whenever you want.
You can also turn a card off if you see problems with the click or tap of a button on your mobile device or laptop. If an employee tries to make an unauthorized purchase, you will be notified and the attempt will be denied.
The world of payment processing is moving forward: Don’t get left behind
While cash is still used to make payments, cashless payment methods are becoming much more popular. In a survey of 1,000 adults in 2017, 44 percent reported that they use debit cards, 33 percent use credit cards, and 12 percent use cash as their preferred payment method.
Electronic payment methods can save your business time and money. If you use debit cards with preselected expense categories, you can get rid of costly and time-consuming processes such as reimbursements, petty cash, and purchase approvals.
About Bento for Business
Bento for Business is a company that offers debit cards that are designed for businesses. The cards have great expense management and spending control features so that businesses can reduce their losses and get their spending under control. Businesses can get up to 10 cards for a low monthly fee of $29. You can give each employee his or her own business debit card and restrict the allowed spending to what the employee needs for his or her job. To learn more business credit card answers and to start your free 60-day trial, call us today at 866.220.8455.