Most businesses are accustomed to using the traditional credit card, usually a Visa, Mastercard or American Express. These operate under the principle of borrowing the funds and repaying them at a later date, which can be subject to hefty interest charges and cash advance fees. Furthermore, the spending limits assigned to credit cards are based on the business credit history and payment records.
In 2015, it was recorded that there were 13.9 million small business credit cards active within the United States, accounting for just under 4% of the total amount of credit cards in circulation. Although a relatively small percentage, these small business accounts spent over $430 billion dollars on their credit cards.
Facts on Small Business Credit Card Spending:
- In 2015, small businesses were responsible for $50 billion dollars of credit card debt
- The average user of a corporate credit card charges 20 transactions per month
- 13% was the average small business credit card interest rate in 2015
Unfortunately, for many small business owners, it can be difficult to completely avoid paying interest charges. When employees have lost receipts or not submitted their expense trackers, monthly payments can be missed and the unnecessary cost of paying interest rates can significantly add up over the course of a year.
Many businesses have shifted to using a corporate reloadable debit card for their employees instead. These allow managers to load funds onto the card prior to being used for a transaction. In addition to the savings they provide from avoiding interest charges, they help businesses better manage their bottom line.
A physical corporate reloadable debit card can be provided to each employee and business managers are able to set budgets and control expenses via purchase request approvals. Since the cards are not tied to the business credit information, they are highly secure if ever lost or stolen as the card can simply be canceled with a click of a mouse and no further transactions will be authorized.
At Emburse, we have helped many businesses in numerous industries switch to using a corporate reloadable debit card to better manage their employee spending as well as eliminate interest charges and fees associated with traditional credit cards. If your organization can benefit from using a simpler method to control expenses and wishes to reduce unnecessary cost of borrowing charges, contact our team today. We would be happy to show you a demo of how corporate reloadable debit cards can be an advantage over employees using the company Visa or Mastercard.