What is a Visa prepaid credit card?
A Visa prepaid credit card may be referred to as a credit card, but it is not truly a credit card. Prepaid credit cards do not provide users with access to lines of credit like credit cards do. When people use prepaid Visas, the charges that they make are subtracted from the balances that they have prepaid on the cards.
Businesses and consumers may both use these types of cards as payment methods. When the cards are branded as Visas, consumers and businesses can use them wherever Visa is accepted. The use of prepaid or debit cards has become increasingly popular with deposits onto the cards increasing from $57 billion to $100 billion in just four years.
Why do people use Visa prepaid credit cards?
The reasons why people use Visa prepaid credit cards varies depending on whether they are consumers or businesses. Some of the reasons that consumers use these card products include the following:
- To purchase and give as gifts
- As a payment alternative to using cash
- To shop or pay bills
- To use as an alternative to banks
- To receive direct deposits
The reasons why businesses might use cards that are prepaid may be different and include the following:
- To have payment flexibility
- To help to control expenses
- To categorize purchases
- To use as an alternative to business credit cards
How do Visa prepaid credit cards work?
A Visa prepaid credit card can be used to make purchases online or in stores at any location that accepts Visa. This means that the cards can be used at millions of merchant locations around the world and online.
Consumers and businesses can purchase the cards and fund them with the amount of money that they want. They can then activate the cards and use them just like they would use credit or debit cards.
The Visa prepaid credit cards can be used to make in-person purchases at businesses that accept Visa cards or to make purchases online by entering the card number and CVV code. When the transactions are completed, the money to pay for the goods or services that were charged to the cards will be subtracted from the Visa prepaid credit card balance.
Can a prepaid Visa be used like a credit card?
Some people wonder, “Is a prepaid Visa card a credit card?” A prepaid Visa is not a credit card. Unlike a credit card, a prepaid Visa does not require consumers or businesses to submit to credit checks since the cards do not provide access to credit. People are able to simply purchase a Visa prepaid credit card online or in a store.
In order to get a credit card, consumers and businesses must submit credit applications and be approved. If they have limited credit histories or poor credit, they might have trouble securing approval for credit cards. Credit card purchases can also incur interest if they are not paid before the month rolls over. Many credit cards also charge high transaction and annual fees on top of the interest charges.
Can I specify spending limits and spending categories?
When you buy a Visa prepaid credit card, you are able to decide how much money to load onto the card. A basic prepaid credit card does not allow you to set spending categories or individual spending limits. The balance that you place on a card will serve as its spending limit.
Businesses are still able to use prepaid reloadable credit cards as a rudimentary tool to help to control expenses. Since businesses can control how much money their employees can have access to with the cards, that can help businesses to keep spending within the company’s budget.
How susceptible is the Visa prepaid card to business fraud?
Visa offers a number of features to businesses for their Visa prepaid cards and other Visa card business products that can help to prevent fraud. Deposits that are held by the card issuers in banks are insured by the FDIC for up to $250,000. The cards also use 256-bit SSL encryption technology for additional protection of your information and your money.
Today, an increasing number of cards contain EMV chips. When these cards are used at chip-enabled card terminals, they use a randomly generated code for the transaction to be completed. This prevents thieves from gaining access to the card data with card skimmers because the code changes with every transaction.
Why cash and credit for business purchases are becoming things of the past
Businesses are turning away from cash and credit to make business purchases for a number of reasons. Using petty cash and reimbursements make businesses susceptible to internal fraud.
Employees may be tempted to skim money from petty cash for their own personal uses, and they may submit padded reimbursement requests or requests that are fraudulent. Credit cards also are more susceptible to fraud. Employees might run up the balances and use the cards to make personal purchases, and the business might not learn about the charges until the credit card statements are reviewed.
Using prepaid or debit cards can help to eliminate some of these problems. Businesses can use the cards to limit the amount of money that employees have access to and can end the use of petty cash and reimbursements.
Business debit cards may have additional expense management features that might make them an even better choice for businesses. Debit cards also allow businesses to immediately see where they are at financially because the transaction costs are subtracted from the available checking account balances.
How do secured prepaid cards outpace traditional alternatives?
The best Visa prepaid credit card might actually be a business Visa debit card that is linked to a deposit account. This type of prepaid reloadable credit card allows businesses to decide how much money to make available on an individual employee expense card and to establish individual daily spending limits.
The cards allow businesses to restrict purchases by the category and to limit where the cards can be used. These features help to rein in spending and to prevent unauthorized purchases, both of which are pervasive problems that are associated with traditional alternatives such as credit, cash, or checks.
Why is it important to have good tracking for employee expenses?
Expense management and tracking are vital for the success of businesses. If you do not have systems in place to efficiently and effectively track your business expenses, it will be difficult for you to ascertain how your business is doing at any time.
A lack of expense tracking can quickly lead to ballooning costs. If you do not know how much money is available, it can lead to employees believing that there is money available to make purchases that you can’t afford. Some employees may also take advantage of a lack of expense management to charge personal items for themselves and claim that the items were for the business.
Modern improvements: How Visa prepaid debit cards build work
Today’s business debit cards from Visa offer modern technological features that help businesses to streamline their accounts payable departments and their payments. These features allow companies to automate many accounting processes and to cut costs involved with paper processing.
Transaction information can flow directly to the accounting software so that it populates automatically instead of having to be manually entered. The cards can be restricted so that unauthorized purchases might be prevented. The cost savings that can be realized from these technological advances can help to spur growth and to increase profits.
How the prepaid cards help to prevent accounting headaches
When companies use reimbursement systems, they ask their employees to purchase goods and services for the company with their own money. The workers then submit expense reports and receipts to request reimbursements of the money that they have spent.
Reimbursements and receipt management are real headaches for accounting staff and employees alike. Employees dislike having to wait for weeks to be paid back for the money that they have spent. Accounting professionals have to process the reimbursement requests and often have to track down receipts that have not been submitted.
Employees may turn in reimbursement requests and receipts late, making it difficult to understand the company’s bottom line. When businesses switch their payment systems away from reimbursements to business debit cards, they can solve some of these problems. The data from the cards can be imported electronically into the accounting software.
Employees are able to take photographs of receipts so that they can also be sent electronically, which helps to solve the problem of lost or missing receipts. Businesses also won’t have to ask employees to spend their own money and can make reimbursements a thing of the past.
Expense tracking software
Some business prepaid debit cards come with built-in expense tracking software that can help businesses to get a better handle on their business expenses. Business owners can decide how much money to make available on each card. They can then establish spending limits on the cards by the day or the week. Business owners can set different spending limits on each card.
Business debit cards may allow businesses to restrict the types of purchases that can be made to specified categories and to limit where the cards can be used to make purchases or payments. They can also control when the cards work and can turn them off or on at any time from their online dashboards on their smartphones or other devices.
Can you really control a credit card?
Credit cards are more difficult to control. Employees might be able to charge purchases on the cards up to the credit limit, quickly leading to debt. Credit cards may be used anywhere that accepts them, and there isn’t as much transparency in the spending that has occurred.
Instead of being able to see a transaction in real time, businesses might be unaware of transactions until they review their credit card statements. Business debit cards do not have these problems and can be a better alternative.
What you should ask before switching to business debit cards
If you are wondering whether to get a prepaid credit card or are searching for the best prepaid Visa credit card, it might make more sense to consider Visa business debit cards. However, there are several things that you should ask before you make the switch.
You need to read the fine print of any business debit card offer that you might consider. You will want to compare the features that are offered by the cards as well as the cost. Good cards should be affordable and scalable. They should also offer robust expense management features and help you to prevent internal and external thefts and fraud.
Features and benefits of business debit cards
The business Visa debit cards from Bento for Business have built-in expense management controls that allow you to set restrictions that are in line with your company’s expense policy. You can set different spending limits on individual cards and restrict the types of purchases that can be made to those that an employee needs for his or her job.
The cards can be limited in terms of when they will work. For example, you can turn cards off when your employees go home and turn them back on when they return to work. Businesses can view the transactions at any time by logging into their online dashboards. If a card is lost or a problem is identified, the business owner can turn the card off from his or her smartphone.
Businesses are able to request a demo and to participate in a free 60-day trial. The cards have earned mentions by leading business publications and hundreds of positive reviews from satisfied customers. Talk to a customer service representative about your business’s payment needs by calling 866.220.8455.
