When business owners are considering whether to give out business credit cards or corporate cards to employees a number of questions come to mind:
- In these times of tight credit, are the benefits of handing out corporate cards worth the risk of impacting my credit? Corporate cards will be linked to my personal credit - if i need to refinance my house, my equipment or vehicles, a revolving credit card line may impede my ability to do so.
- If I give out a credit card, can't the employee just run up the bill? Most small business credit cards or corporate cards are open spend cards. This means employees can spend the entire credit limit (even for legitimate transactions) and I won't even know about it until the statement shows up.
- How do I deal with misuse from a disciplinary standpoint? If employees do make unauthorized purchases - at what point do you risk firing people who are otherwise good employees.
- By giving out a corporate card to an employee, will it make them feel like they have an expense account?
- Will the credit line be enough to support my company's needs? Smaller credit lines are a simple fact of doing business in a post bank crisis economy. Companies no longer have access to large lines unless their companies are large or business owners are willing to co-sign the card account.
For every day employee spending, a business credit card may not be the answer for most small businesses. Now that a business Visa prepaid debit card like the PEX Card Service exists, companies facing the list of questions above can provide cards to employees with less worry. PEX Card offers prepaid debit cards for business. We link online tools to cards to give employers full control and visibility of employee spending.
With the advanced controls of the PEX Card Service, businesses can feel more secure about handing out funds to employees, but track them more closely because they are electronic and minimize credit risk.