Prepaid Business Credit Cards
Prepaid Business Credit Cards
Prepaid credit cards became increasingly popular in the late 1990s. A lot of people are using them today. One might pertinently ask what prepaid business credit cards are and how they differ from traditional credit cards. Over the years credit card companies have faced the problem of tackling customers who don’t meet the credit requirements to use their cards. Again among the people who do qualify many cannot pay back the debts and file bankruptcy. Naturally this means huge losses for credit card companies.
So, secured cards were offered by credit card companies to customers, who could use them without fear of incurring debts. Once a customer established his reputation of paying up on time, credit card companies slowly increased his credit limit.
This was the precursor to the prepaid business credit cards in circulation today. The main difference being that, users are offered credit for purchases made via these new cards. You have the freedom to set the limit of credit on the card by depositing the necessary funds into the account.
This very simply means that you decide beforehand what your spending limit will be. If you deposit 100 dollars against your card you can spend only up to 100 dollars through your card.
Does this sound restricting? Well in some ways it is restricting, since it does not allow you to get carried away by a whim and spend on anything that catches your eye. You have to judiciously purchase each item constantly keeping in mind the credit limit. Thus it does restrict your spending. But it also offers you great flexibility and freedom.
A prepaid business credit card can you give you freedom and great joy while spending for the following reasons:
* You can shop with a light heart knowing that you have already paid the bill.
* You can shop at your heart’s content knowing that you have set a limit as to much you can spend.
* If you have a habit of splurging beyond limit and then being inundated with debt problems, this card is perfect for you.
* In short it can be exhilarating to know that you can shop all you want without having to deal with adverse consequences later.
Prepaid credit cards don’t depend on actual credit for spending. So the mandatory credit reference checks are waived.
Of course to avail of such a specialized service you will have to shell out cash. That seems to be the only drawback. Companies charge an application fee for issuing the card. Other companies charge subscription fees on a monthly basis. Loading the card, making purchases, withdrawing cash-all this may be charged. In case your card gets lost/stolen you have to pay for replacement of the card. Also when the existing card expires you may have to pay renewal fees.
So keep this one con in mind when weighing the multiple pros of prepaid business credit card. You have to decide how much you are willing to pay for a service that benefits you and your family.
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