Expense card comparison for British businesses

With the huge range of business cards available on the market, it can be difficult to determine what is best for your business. The good news is that once you break it down there are only 3 major card types available:

• Debit Cards
• Credit Cards
• Prepaid Cards
  
  

In this article, we’ll help you understand the pros and cons of each business card.

Debit Cards

When a transaction is made with a debit card, funds are deducted from the available balance of the company bank account and paid to the merchant.

Pros

• Cards draw from your company bank account at the time of transaction which means that money is available for other payments.
• Some debit cards have access to an overdraft facility.
  

Cons

• If a card is lost, or irresponsible spending occurs, all of the money in your company bank account is at risk.
• Financial checks and paperwork may be required to qualify.
• No access to a line of credit.

Credit Cards

When a transaction is made with a credit card, funds are borrowed from the card provider (up to an approved credit limit) and paid to the merchant. These borrowed funds must be paid back by a specific date or interest will be charged on the outstanding balance.

Pros:

• Credit can help you manage business cash flow.
• Most credit card issuers provide rewards or are linked to a points program
  

Cons:

• Credit card fees and interest repayments can be expensive.
• Managing credit repayments requires time and resources.
• Extensive application process with credit checks, personal guarantees and paperwork are required to qualify for a credit card (which can affect the personal credit scores of company directors)

Prepaid Cards

When a transaction is made with a prepaid card, funds are deducted from the available funds loaded on the card and paid to the merchant. You cannot spend more than what is loaded on a prepaid card.

Pros:

• No credit or financial checks are required to qualify.
• Staff can only spend what is loaded on the card.
• If a card is lost or frauded then your exposure is limited to what is loaded on the card.
  

Cons:

• No access to a line of credit

Virtual Prepaid Card

A virtual card is a payment card that exists solely in a digital format. It functions like a traditional payment card with a 16-digit number, an expiry date, and a CVV, but it lacks physical form, such as a magstripe or chip. This virtual card can be used for online and in-app purchases or you can use it when purchasing goods or services over the phone. Find out more about what a virtual card is here.

If you're interested in a simple, all-in-one card solution, Caxton is the answer. With Caxton you can issue both physical virtual prepaid expense cards, control spending and automate expense reporting from one central account, allowing for a quick statement reconciliation.

Additional considerations

Once you know what kind of corporate card you want for your business you'll then need to decide which features you want. Each card provider specialises in a different offering. Caxton offers competitive FX rates, automated expense management, and integration with your accounting system to handle all of your business’ needs.