Company cards: credit cards or prepaid cards?

We often talk about credit cards and prepaid cards without really understanding what the differences are between the two. Credit cards and prepaid cards may seem very similar for the type of service they offer but have important differences. Which company card to choose depends on the current needs of the company and on the use made of it by the collaborators to whom the cards are assigned.

 

Business cards

credit cards

Business credit cards or prepaid business cards are fundamental tools for those who manage and administer a business, as they are necessary to monitor the various payments that are made for business expenses: from suppliers to utilities, as well as scheduled or unexpected online purchases. In fact, corporate cards, whether they are credit or prepaid, offer the possibility for the company, company or entrepreneur to analyze the expenses made during the month, almost in real time, through online access to a control panel. In addition, it is possible to create name cards for employees, to set different spending limits on the basis of cards, to monitor travel costs and other expenses made by employees, who are no longer required to pay cash and fill out the expense reports. The elimination of employee expense reports has a double advantage: on the one hand the worker no longer has to devote time to reporting expenses, subtracting hours of work from his primary and more productive activities, on the other the administration does not have to make payments and preventive control of expense slips; the whole process therefore becomes more streamlined for the benefit of all those involved.

 

How the credit card works

How the credit card works

A credit card is an electronic tool, which must be directly connected to a current account and which allows you to make payments regardless of the economic availability on your account. This means that it is not necessary to have the exact economic sum to acquire a specific good or service. Usually, to pay for your expenses you have a period of 30 days, this time frame is generally variable depending on the cards and in the case of American Express a payment extension is granted up to 51 days. For this reason, it can be safely said that the bank makes a form of credit to its customer, being able to make purchases even without liquidity on the account. With a credit card, you can pay at merchants, withdraw money at ATMs or rent a car. But how much does a credit card cost? In most cases, the credit card requires the payment of an annual fee and has a slightly more complex activation process. In fact, it is necessary to have a constant flow of incoming money in order to have the bank guarantees that allow the release of the card. In a nutshell, if you are a private individual you must have a salary or a pension, if you are a company or a VAT number you must have income requirements such that the bank can be considered the reliable person.

 

How prepaid cards work

prepaid cards work

Prepaid cards are another electronic payment system which, unlike a credit card, are not linked to the customer’s bank account. They offer the same services as a credit card, such as the ability to pay in shops, make reservations, withdraw cash and pay online via the internet. In addition, there are prepaid cards, such as Soldo cards, which can be used to give employees access to corporate money, while controlling all expenses made, just like business credit cards, the difference is zero credit. Soldo cards can be used as fuel or employee prepaid cards. How do they work? After making a payment in one of the previously described methods, the sum present is immediately removed from the card which can never have a value less than zero dollar ;this feature makes it a safer card because it prevents possible fraud attempts. Another advantage of prepaid cards is that they do not have a limit of “plafond” which means that there is no limit in the amount that can be loaded on the card and can be variable according to needs.

Obtaining a prepaid card is very simple, in fact, it does not provide for any credit reliability requirement and therefore they are very useful for those customers who, for various reasons, are unable to obtain a credit card from their bank.

Are you interested in the topic? Are you a craftsman, a professional or an entrepreneur and do you want to evaluate the business cards on the market? Ask for a free consultation

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