With credit card debts being at an all time high, some people and businesses are now considering purchasing prepaid business credit cards
instead of regular credit cards. In recent reports, it's been estimated
that at least 50 million people cannot qualify for a regular credit
card because of past debts and unpaid fees. Below are the pros and cons
of using a prepaid business credit card and how it could help your
Pro: Doesn't Matter if You Have Bad Credit
If your business is just starting out, and you don't have financial backing or a great credit history, then you may want to look into getting a prepaid business card for your company. It doesn't matter if you have bad credit or not because there is no credit check involved.
Pro: Safer than Carrying Cash
This is a good point to keep in mind when making your decision as to whether or not to sign up for a prepaid business credit card. If you lose your hard earned dollars, you'll be stuck having to do without.
Pro: Can Be Replaced if Lost or Stolen
This is another great advantage to having a prepaid business credit
card. If your card gets misplaced the bank can replace the card and
take care of your financial situation.
You can use a prepaid business credit card anywhere regular credit cards are accepted. It's no longer a hassle when shopping online or going to ATM machines; this makes it's easier and faster to shop.
Pro: No Credit Card Bills
Considering the high interest rate on regular credit cards today, it would be to your advantage to keep and use a prepaid card. Save yourself another high interest bill.
Pro: Helps Control Your Spending Habits
You are only allowed to spend the amount of money you put into your card; whereas with a regular credit card, you can overcharge and end up having to pay enormous credit card fees. You can't spend it if you don't have it.
Con: Less Cash on Hand
Since you will have to spend your money upfront when you get a card, you will have less cash in your pocket.
Con: Have to Pay a Small Fee
Banks usually charge you a small fee to receive a prepaid credit card. Having a prepaid business credit card is more expensive than having and using a checking account.
Con: Some Places Don't Accept Prepaid Business Credit Cards
It depends mostly what state you live in, but some hotels and car rental agencies do not accept the prepaid cards.
Con: Doesn't Improve Your Credit
Some banks do not consider a prepaid credit card as a means of improving your credit history. If you can keep and maintain a card over time, the bank might reconsider your situation; however the key word is...might.
Con: You Have to Keep Track of Your Spending
A regular credit card company sends you a monthly statement, whereas you're on your own with a prepaid business credit card.