Running a small business is a lot of work. It demands your time, attention, and money. A business debit card is a great way to stay organized and on top of your business’ needs!

What is a Business Debit Card?

A business debit card is essentially the same as the debit card that’s sitting in your wallet now. It allows employees to purchase day-to-day items without having to go through a lengthy approval and invoicing process.

How Do Business Debit Cards Work?

Transactions on your business debit card are instantaneous and are linked to an account funded by the business. You can use a business debit card no matter the size of your company, and it can work in several different functions. All you need to do is open a business bank account to get started.

Some of the ways people use these cards are for salespeople to take clients out, drivers to purchase gas, or for administrators to run out for supplies if needed. These cards help make businesses more efficient in regard to purchasing.

How to Get a Business Debit Card (4 Steps)

Signing up for a business debit card is a simple process.

  1. First, contact the bank or provider that you want to go through and discuss what the business debit card requirements are. For some institutions, this could include showing a business license, minimum deposit amounts, or monthly fees associated with the account.
  2. Next, choose the account that’s right for you. There are almost endless options out there. Pick an account that matches a fee structure that works for your business. You don’t want to choose an option that charges more fees for the way that you’ll be using the card. For example, North One’s Mastercard gives flexibility on withdrawals and deposits, which allows you to load cash at 90,000 locations nationwide, with no additional charges.
  3. After you know what kind of business debit card and account you want, it’s time to fill out an application.  Business debit card applications are simple and easy to fill out. After you have the application completed, you will receive approval along with your debit card in the mail. If you are denied, you will also be notified of that.
  4. Once you get your new business debit card in the mail, you simply need to activate and set a PIN number and you will be off to the races!

Get started on these steps by applying for an account with North One. North One is a fast and easy deposit account where you can make payments easily, keep tabs on your money and ensure security of your business finances.

What Are Business Debit Card Requirements?

As previously mentioned, there are some requirements in order to set up a business debit card. Some of these could be:

  • Showing your business license
  • Minimum deposits [MS1] 
  • Monthly fees
  • Signing a contract or agreement

The Pros and Cons of Getting a Business Debit Card

As with anything, there are pros and cons that you need to look at and think about when it comes to signing up for a business debit card. Take the time to review both and what they mean for your small business.

The Pros

So, why should you get a business debit card? For one, it’s extremely convenient. Most businesses and merchants accept debit cards, so it’s unlikely that you’d have to have another form of payment as a backup method. Additionally, it’s simple to use since all you need to do is swipe and enter your PIN.

Another pro is that the money is automatically deducted from your account. This means you know exactly where you stand financially and don’t have to do any calculations or worry about paying interest. This helps keep your business on a budget and on track. There’s truly nothing more stressful than having a credit card bill on top of other money that you owe. It’s much easier to keep track of your spending with a debit card.

Finally, debit cards are easy to qualify for. Credit cards usually require credit checks and a long application. Debit cards are often offered when you open a business bank account, and any application you fill out will be short and simple.  

The Cons

While there are pros, you do still need to understand the cons of a business debit card. The first and most important is probably that you can only use the money you have. For some businesses, you might need a credit card for a bigger purchase if you don’t have a ton of cash flow.

Another con of the business debit card is that you can’t build credit with it. While that might not seem like something you are worried about, it can impact your ability to get a loan should the business grow or need one for any reason. It might be beneficial to have a credit card and use it sparingly and responsibly to grow credit.

Finally, in recent years there have been more and more debit cards that have been compromised at merchant card readers and ATMs. And when you have funds stolen from a debit card, it’s harder to get that money back.

Frequently Asked Questions

When should you use your business debit card?

It’s best to use a business debit card for day-to-day transactions and smaller purchases. These can include office supplies, a client lunch, or a birthday cake for the office. If your business happens to have a higher cash flow, you can use your debit card for larger purchases as well.

Is it better to have a business credit card or a debit card?

The answer for this really depends on your business’ needs. Credit cards allow for higher spend limits, the ability to grow your credit score, and more security. Many credit cards also offer points or cash back for certain purchases. For example, Southwest partners with Visa to provide airline miles every time a purchase is made using the card. This means, eventually, some free airfare for your business.

However, debit cards help keep your spending and budget on track, are easy to use, and allow for more visibility into your accounts. It’s all about what works best for you!

Can you use a small business debit card for personal use?

The short answer? No, you can’t. The long answer? Technically, yes, but it’s an extremely bad practice. When you use your business debit card for personal transactions, it can lead to tax, legal, and operational problems. And, if you continue to use your business card as a personal one, the problems will only grow as your business does. So, just don’t do it.