What's Up With Prepaid Business Credit Cards?
What are prepaid business credit cards and what types of benefits can they afford you? Credit
cards have become a part of daily life for businesses and establishing credit for a new small
business has become vital. Unfortunately, not everyone who starts up a new business has a
sufficient personal credit history to qualify for a mainstream business credit card with a significant
credit line. Prepaid credit can be the answer. Keep in mind that there are both benefits and
drawbacks associated with the idea of prepaid cards. If you want to make the best decisions
regarding this type of card, then you'll have to shop around so that you can make an informed
decision. But prepaid cards are capable of helping you to build up credit without putting you at risk
of falling further into debt, or hurting your credit rating even further.
So what are prepaid cards? Prepaid cards are essentially like any other type of card as they are
backed by the traditional companies except that they are completely controlled by the card user
rather than by the credit company. The account for the prepaid card is opened with the help of a
deposit from the cardholder which then becomes the limit. Whenever the cardholder would like to
have more "credit," they simply make an additional deposit. With a prepaid card, you must keep
clear records of your deposits and expenditures because if you have a prepaid card and you try to
spend more than you have deposited to the card, your purchase will be denied. In other words,
prepaid credit cards, including prepaid business credit cards, operate a lot like gift cards in that
you can only spend the limit on the card and nothing more. This makes these a prepaid credit
cards an excellent option for individuals and businesses that are looking to build more credit.
There are numerous advantages associated with prepaid credit which differ somewhat from the
advantages of traditional business credit cards. For example, in some ways prepaid business
credit cards are more advantageous because it isn't possible to go into debt when using a prepaid
card for your business, primarily because your ability to spend is limited by the balance on the
card and how much has been deposited into it. Another advantage of prepaid business cards is
that there are no interest charges and you can use these prepaid cards absolutely anywhere that
traditional business cards are accepted. Finally, prepaid credit make it possible for you to build
credit because the majority of the companies offering them report the payments that you make to
the credit bureaus.
Because they offer the same convenience as a traditional business card without any of the worry,
a prepaid business card might be the answer if you are starting a business and have less than
stellar credit. All you have to do is shop around to find the one that works best for your business
and apply online. Good luck!