Business debit card vs. credit card: Learn which fits best for you

If your business is expanding into new markets or has a supply base in different countries, you sooner or later ask the question “business debit card vs credit card – which one is better?”. Even though there is no definite answer, we are going to explain the pros and cons as well as the business models of both cards, so that you can make a solid decision, reduce risks and increase your flexibility.

Business debit card vs credit card: What’s the difference?

At first sight, both terms sound similar, however, debit card vs credit card for companies offer different business models, which vary substantially in their security and cost structure.

Debit cards are directly linked to your company’s bank account. If you make a transaction, the amount is immediately deducted from your overall balance. In contrast, a credit card offers overdrafts, which you usually need to pay once per month. Even though this might be an advantage at first sight, overdraft fees belong to the most expensive debts in the world and therefore increase your overall risk.

Another difference lies in their usage. While both credit and debit cards can have PIN codes to verify a transaction, in some countries, such as the US, a signature may also be required when using credit cards.

Debit cards: Pros and cons

Debit cards offer a lot of advantages for businesses which have security concerns and need to restrict overspending. With a debit card, businesses can only spend the available balance. They keep full control over their spendings, without paying costly overdraft fees.

Other safety features include limiting the available balance or adjusting the expiration date of every single debit card, as admin and user rights are separated. Further, depending on the card issuer, you can obtain cheap and transparent foreign exchange rates, which comes in handy if you regularly make online purchases in different currencies. Another advantage is that debit cards are usually easier to obtain than credit cards, as the amount of the possible overdrafts depends on the company’s financial figures.

Not being able to receive an overdraft might be a disadvantage, if your business quickly needs a credit. Further, credit cards often encourage customers with reward and loyalty programs, which is usually not the case for debit cards.

Pros

• No overspending
• No costly overdrafts
• Highest security standards
• Highly customizable
• Cheap FX rates with multi-currency function
• Easy accessibility

Cons

• Only available funds can be spent
• Usually less reward or loyalty programs

Credit cards: Pros and cons

Credit cards offer your businesses the flexibility to spend money, even if the account doesn’t have the necessary funds. This can be advantageous for trading businesses, which have huge upfront costs to finance their products.

Credit card providers usually reward their customers through loyalty programs, which mainly aim at individual customers, but can also be advantageous for businesses. Credit cards for businesses are also customizable, so that you can limit the credit line for each individual employee.

However, this flexibility comes at a huge price tag. Credit cards are known for issuing the most expensive fees along all credit lines. If you hand out credit cards in your company’s name to your staff, you need to ramp up your monitoring efforts in order to avoid accidental overspending. Further, while debit cards don’t need a lot of paperwork, applying for a credit card usually requires a stricter approval process.

Pros

• Available credit line
• Reward or loyalty programs available
• Highly customizable

Cons

• Expensive overdrafts
• Difficult application process
• Needs stricter supervision

Multi-currency debit cards with all advantages and more cost savings

If you want to make a decision between business debit card vs credit card, your own spending behaviour plays an essential role. If you regularly conduct foreign transactions, the amnis multi-currency business debit card might be the best option, as you can save foreign transaction costs for online purchases or on business trips. Once you made a decision, learn how to get a business debit card with amnis.

The amnis multi-currency debit card can be used wherever Mastercard is accepted and gives your staff more flexibility, without increasing your risk of overspending or taking overdraft fees.

Even better: You can choose different subscription plans, which lay out your foreign transactions fees transparently, no hidden fees involved.

Summary: Control your spendings with amnis

The right choice between a business debit card vs credit card mainly depends on the nature of your business. If you want to reduce your risk as well as reduce foreign transaction fees to a minimum, check out how to use the multi-currency debit card from amnis. You can assign physical and virtual debit cards to departments and even individual team members while still keeping full control over all your expenses.

amnis even facilitates and streamlines the work of your accounting department. amnis tags allow you to assign payments, invoices and currency exchanges to multiple categories to easily identify all transactions, which belong to specific projects, events or even personnel expenses.

Your amnis demo account

Besides its multi-currency debit card, amnis offers multiple payment options to streamline all your expenses and reduce unnecessary transaction fees. For instance, amnis enables you to avoid SWIFT and instead profit from local payment options such as SEPA or ACH, no matter where your business is located. Try the free amnis demo account to find out how much foreign transaction fees you can save.