Types of Commercial Cards
Navigating commercial lending and deposits (Opens in a new Window) solutions is essential for any business’s finances to operate smoothly. Yet, with so many commercial lending options, it can be difficult to decide what’s best for your business.
In this guide, we explore commercial payment card systems that improve your business’s efficiency and financial security.
What Are Commercial Payment Cards Used For?
Commercial payment cards are a convenient way for businesses to make payments electronically instead of relying on paper methods, such as cash or check. Payment cards also have the added bonus of leaving an electronic record of payments, which makes budgeting and bookkeeping easier.
Just like for personal use, there are multiple types of commercial cards for employees:
- Commercial Debit Cards: These cards are connected to the business’s checking or savings account. When a team member uses the card for payment, funds are transferred out of the connected account. Businesses use debit cards for supply purchases or to pay internet and electric bills, for example.
- Commercial Credit Cards: These cards are connected to a business’s line of credit, which is money that the business is approved to borrow. Commercial credit cards can be a useful alternative to a loan, because the business has the option to only borrow (and pay interest on) a portion of their maximum credit limit. Businesses can use commercial credit cards to access capital to invest in equipment, software, and more.
- Prepaid Business Cards: These cards act like gift cards—they have a certain amount of money loaded on them that employees can spend until it’s gone. Prepaid business cards offer the convenience of debit cards without the risk of connecting directly to a checking or savings account.
Enable your business to operate in real-time with commercial payment cards. Connect with an IMCU lending expert to learn more.
What Are Examples of Commercial Cards?
Businesses can implement a commercial card program to streamline a variety of payments. For example, these cards can centralize tracking across the following purchases:
- Business-to-Business: Repairing equipment and stocking office supplies.
- Travel and Entertainment: Traveling for sales presentations, service requests, and client meetings.
- Invoiced Goods and Services: Ordering inventory and hiring contractors.
See how your business can leverage commercial cards. Speak with one of our experts or visit your local branch to explore your business’s options.
What Are the Benefits of Commercial Cards?
Commercial card payment systems provide businesses with both security and efficiency. Paper payment methods, like check and cash, create extra risk for businesses and their employees. In fact, the Association for Financial Professionals reports that payments made by check are the most susceptible to attack and fraud, resulting in significant financial losses for organizations. Digital payment methods are lower risk for both payers and payees, which make commercial cards an effective choice for businesses that want to feel protected when investing in themselves.
Commercial cards also offer streamlined tracking compared to checks and cash. Instead of needing to manually record each and every transaction, employees’ purchases are automatically recorded digitally. This makes it easy to look back at expenditures for budgeting purposes.
Providing employees with payment cards also cuts out the need to manage reimbursements. This gives employees peace of mind, and it cuts down on administrative work, so your team can focus on providing the best service possible.
Who Are Commercial Cards Issued By?
Commercial card services can be provided by commercial banks, online lenders, and local credit unions. Different commercial card issuers have unique pros and cons, so it’s important to choose a lending partner that’s right for your situation. Let’s take a closer look:
- Commercial Banks: These for-profit institutions are often easily recognizable by name. They can often offer higher credit limits than smaller banks, but they may also charge higher interest rates.
- Online Lenders: Online lenders offer options beyond what’s available within a business’s local area. However, this means that customer support is detached from where the business operates.
- Credit Unions: Local credit unions are owned by their members, so they put member benefits first. Often, this results in superior customer service and favorable interest rates when compared to other banking options.
Ready to learn more about what a credit union can offer your business? Get in touch today!