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If you're like most people, your personal debit card is indispensable. A business debit card can be just as convenient. Instead of carrying around large sums of cash or using a cumbersome spend-and-reimburse process, you can pay for business expenses with a debit card that links directly to your business bank account—and won't rack up any debt in the process.
If you qualify to open a business bank account, you almost certainly qualify for a business debit card—no business credit required. Here's more on how business debit cards work.
Can I Get a Debit Card for a Business Bank Account?
Business bank accounts typically fall into four categories: savings, checking, credit cards and merchant services (to accept payments for goods or services). You're most likely to get a debit card linked to your business checking account, though it may be possible to link one to a savings account as well.
You may need a business license or federal Employer Identification number (EIN) to open a business bank account. You can get one at any number of banks and credit unions. Account types and features—including debit card features—can vary quite a bit, so be prepared to shop around to find the right fit.
How Do Business Debit Cards Work?
A business debit card works just like a personal one: You can use it to make purchases, pay bills or withdraw cash at an ATM. Business bank accounts sometimes offer features most personal accounts don't have, which could make a debit card linked to this account more useful.
For example, you might find a business account that sweeps idle funds into investments that will earn you money. Some business checking accounts pay interest or function as a money market account. These types of accounts typically come with higher fees or higher minimum balance requirements. When choosing a business bank account, consider the cost of opening and maintaining your account:
- Monthly service fees
- Minimum opening deposit
- Minimum balance
- Overdraft fees
- Cash deposit fees
- Foreign transaction fees
- ATM fees
- Additional service fees and penalties
Fees and benefits can vary widely between financial institutions and from account to account. You may also find a range of digital capabilities, and these can have an impact on how you use debit cards in your business. Your business bank account may come with digital money management tools that integrate seamlessly with your accounting software, for example, so it's possible to manage your business finances from your mobile phone. Your banking app may be able to capture receipts, track spending or even place controls on your cards.
Card controls can help you manage debit cards for your employees. Instead of having your delivery staff pay for gas out of their own pockets and submit bills for reimbursement, for example, you can issue debit cards that only work at gas stations and have a weekly spending limit of, say, $60. Digital tools can help you track your money and spending—for yourself and across the enterprise. If a capable digital experience is important to you, shop around for a financial institution that delivers the options you want.
At the same time, don't overdo it on bells and whistles if it's not warranted. Your business banking relationship will evolve over time, so if you only need a basic business account with a debit card now, choose that. As your business grows—and your needs increase—you can always upgrade to a more feature-rich account.
Business Debit Card vs. Business Credit Card
In addition to a debit card, you may also want a business credit card. Which is better? In reality, it's nice to have both. Because debit cards draw directly from your checking account, they help you avoid running up a credit card balance every time you make a purchase.
On the other hand, a business credit card can help you build business credit—a vital asset when you're starting and growing a business. A credit card can also help you smooth over cash flow issues or finance equipment and other expenses. Business credit cards may earn rewards—and those rewards can be substantial if you use your credit card to pay for large expenses. If you're unsure what kind of business credit card you might qualify for, you can check your business credit report online.
Before getting either a debit or credit card for your business, compare the costs and consider how you'll use the cards. Who will be authorized to use these cards—and how? What safeguards do you have in place to avoid misuse or fraud? If you're not ready to issue and track debit or credit cards for your employees, you might consider using prepaid cards for everyone but yourself. You can load and reload prepaid cards with enough money to cover essentials without putting your bank balance or credit line at risk.
Finding the Right Debit Card for You
Getting a business debit card is an important milestone: It goes hand in hand with opening a business account and setting up the financial operation of your business. Shop banks, credit unions, business banks and online banks to find the best fit. The account you need is out there somewhere—and attached to it is the business debit card that's right for you.