Unlike company credit cards, prepaid spending cards can only be used after the finance team has reviewed the requested purchase. Team members log onto a vendor’s website, find what they’re looking for, and enter their card details to finalize the purchase. In many ways, prepaid expense cards work in exactly the same way as a company credit card. It also means team members don’t have to pay the bill upfront. This corporate liability means that team members file expense reports so the company can reconcile charges with the card statement each month. Used in many bigger businesses where there are multiple people purchasing at any given time, these card programs remove the liability from the account holder and place it on the business. This means cardholders can’t spend more than what’s loaded onto the little piece of plastic in their pockets. Prepaid expense cards, however, are a little different, and they solve for a lot of these concerns.Īs the name suggests, prepaid expense cards are cards with preloaded amounts. And at the end of the month, the account holder is personally liable for the bill. Because the account holder is basically extending their line of credit to multiple team members, there’s no clear or proactive way for them to retain control over spend, manage transactions, or monitor purchases. However, issuing company credit cards to team members can be a little nightmarish. These cards are typically used by small business owners and entrepreneurs who will add a select few users to the company credit card to make purchases. They allow team members with purchasing power to buy goods and services on behalf of their organization using company funds. In this blog, we’ll break down the differences between prepaid expense cards and company credit cards.Ĭompany credit cards essentially work in the exact same way as a personal credit card. After all, both cards offer ways for team members to spend money on work expenses without having to first foot the bill and then request a reimbursement later.īut the similarities between these two cards ends there. Okay, we’re exaggerating to you a little bit. What do prepaid expense cards and company credit cards have in common? Absolutely nothing.
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