If you are the owner of a business or a sole trader, a business bank account helps to separate your company finances from your personal finances. Additionally, they’re specifically designed to help you run your business with business-friendly services and features.
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What is a business prepaid card?
A business prepaid card acts like a debit card, but money needs to be added to the card in advance to make purchases or withdrawals from an ATM. A prepaid card is useful for your business as it is a convenient way for you and your employees to spend money without going over budget.
For example, a prepaid card for business could be used for employee expenses if they travel to meetings or for buying things like office supplies. It could also be useful if you plan a team social – the card can be used to buy the first couple of rounds of refreshments.
Plus, a prepaid card does not require a credit check, so the application process is more straightforward than a credit card. You can normally apply for a card online through the provider’s website or app.
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Why should you get a business prepaid card?
Prepaid business cards can have a range of benefits for your business and make managing expenses easier. Here are the main ones:
Controlling your spending
As only the money loaded onto the card can be spent, using a business prepaid card makes it easier to limit and keep track of spending. Many also integrate with your accounting software.
Earlier expenses
You’ll be paying for expenses at the point you load funds onto the card rather than after money has been spent so you’ll know what your costs are sooner. There’s also no reimbursement admin.
No checks
You’re not borrowing money with a prepaid card so no credit checks are required when you apply. This makes it quicker and easier to get a business prepaid card than a business credit card.
Lower charges
Although a range of fees can apply to business prepaid cards, the cost is often lower than for business credit cards. Make sure you’re clear about what the fees are before you apply for one.
More flexibility
Using business prepaid cards instead of company credit or debit cards makes it easier to issue them to a large number of employees and you can control and monitor their individual spending.
How does a business prepaid card work?
Before you can start using your prepaid card for business, you’ll need to load funds onto the card so that it has a balance. This can usually be done online via the provider’s website or app.
Once the money is in the account, the card can then be used by yourself or your employees to make purchases. When the balance becomes low, you’ll then need to top it up with additional funds.
Some cards also allow you to set spending limits for each card you own, so this helps you to keep track of your budget.
Business prepaid cards can also be used if you have meetings abroad. However, always check the fees for overseas transactions to see whether you could get a better deal elsewhere.
How to compare business prepaid cards
It’s important to compare prepaid cards to find the right one for your business. Here are some of things to consider when you’re reviewing the cards available:
Decide what features you need
Do your research and explore all the different prepaid cards in the market before making a final decision, as each card will offer different features. Evaluate your priorities and ensure that the card ticks all your boxes.
Look at the fees involved
Prepaid cards do come with some fees, so comparing costs will help you to find the cheapest deal. Fees might be involved when you withdraw cash, make purchases, order additional cards, make balance enquiries and use the card abroad.
Check your eligibility
Before making your final decision, make sure you read all the terms and conditions to find out whether your business is eligible for the card. Once you have this information you can then apply for a card that’s right for your business.
Pros and cons
Pros
No credit checks when you apply
Accepted by most businesses that take card payments
Useful for budgeting
Can be used for spending abroad
Cons
Fees can make them expensive
Prepaid cards are not covered by Section 75
They don’t work for all transactions
Cannot increase your credit score
Our best business prepaid card
Our editors have picked their top prepaid card for business based on various factors, including fees and transaction charges.
Editor’s pick
The Tide Expense card offers convenience and security for your team's expenses. Manage all your team's cards in one place, with the ability to freeze and cancel cards to control unauthorised usage.”
Tide Expense Card
Administration fee
£5 a month
UK transactions
Free
UK ATM withdrawals
£1
Load charges
Bank transfer: £0.20 & debit card: free
Show Details
Eligibility
Permanent UK Resident
YES
Minimum Age
18 years
Where can business prepaid cards be used?
A business prepaid card can be used in any UK retailer that accepts debit or credit cards, so this means it should be accepted by most businesses.
A prepaid card can also be used abroad and some cards allow you to add euros or US dollars onto them in advance. This could save you money in foreign transaction fees, and because you’ve preloaded your card with the correct currency, exchange rate fluctuations won’t affect the balance on your card.
If you travel to several countries with different currencies, look for a card that lets you load multiple currencies onto it.
Other products for your business
Business current accounts
If you are the owner of a business or a sole trader, a business bank account helps to separate your company finances from your personal finances. Additionally, they’re specifically designed to help you run your business with business-friendly services and features.
Business credit cards
Business credit cards – also known as a company credit cards – are held by a business rather than an individual. That means they don't affect your personal credit score, and are offered by banks based solely on the company's performance.
Business savings accounts
A business savings account could give you a better return on your funds if you currently have a large amount of surplus cash sitting in your business account.
Business insurance
Business insurance is a term for the different types of covers designed to protect businesses. It protects your company against financial risks if you need to make a claim or if one is made against you.
Other products for your business
Business current accounts
Business credit cards
Business credit cards – also known as a company credit cards – are held by a business rather than an individual. That means they don't affect your personal credit score, and are offered by banks based solely on the company's performance.
Business savings accounts
A business savings account could give you a better return on your funds if you currently have a large amount of surplus cash sitting in your business account.
Business insurance
Business insurance is a term for the different types of covers designed to protect businesses. It protects your company against financial risks if you need to make a claim or if one is made against you.
FAQs
Can I go overdrawn on a prepaid card?
No, you can’t go overdrawn on a prepaid card as you can only spend the money that is on the card. You can’t borrow any money or fall into debt with a prepaid card.
Can I get more than one card?
Yes, you can get more than one card. Some providers allow you to acquire additional cards to pass on to other people, such as employees, friends or family. They will only be able to spend the money added to the specific card they’ve been given.
Are prepaid cards good for travel money?
Yes, prepaid cards can be good for travel money. Prepaid cards can be used around the world, but you may also wish to look out for travel prepaid cards that can be loaded with the currency of the country you’re travelling to, which usually reduces the cost of spending overseas. Before choosing a travel prepaid card, however, explore other options for spending money abroad.
How old do I have to be to get a prepaid card?
It depends on the card. Some require you to be 18, while others allow younger people – with parental permission – to get a card. Some providers are happy to issue cards to anyone over the age of six.
Is my prepaid card protected by Section 75?
No, your prepaid card is not protected by Section 75 because only credit cards are protected. If something goes wrong with a transaction, you may be able to get help in reclaiming your money through the Chargeback scheme.
Can I make international payments with a prepaid card?
Providers can offer other services through your prepaid business account, like sending or receiving international payments. This can be useful if you often send money to other countries or receive payments from abroad.
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