Although they may look almost identical, credit cards and debit cards function in very different ways.  When it comes to business use these differences can play a major role in deciding which card is right for your company.  In this article we’ll go over some of the reasons credit is better than debit cards for business.

1. Credit Score

As opposed to debit cards, credit cards affect a business’ credit rating.  By completely paying off the credit card balance before the due date and staying below the set credit limit, a business will improve its credit rating over time.  Failure to pay off the balances in full, missing payment dates or exceeding the credit limit will negatively impact the credit score of a business.  Debit cards, on the other hand, have no impact, positive or negative, on credit histories.

2. Extended Warranties

Certain credit cards provide extended or upgraded warranties when goods are purchased with the card.  Purchases that are lost, stolen or damaged may be replaced by the credit card company provided certain conditions are met.  Debit cards, on the other hand, do not offer similar benefits.

3. Car Rental Insurance

Many car rental companies require a credit card for a rental in the first place.  On top of that, certain credit cards provide the user with car rental insurance allowing them to waive the coverage provided by the rental company which results in substantial savings.  Most cards that provide this sort of coverage insure damaged vehicles up to their full value and have policies for injury and death that equal that provided by the rental company.

4. Lost Or Stolen Cards

Credit cards generally provide greater protection when fraudulent purchases are made or a card is lost or stolen.  A misappropriated debit card that’s used to drain the related bank account may leave the user out of pocket, whereas a credit card isn’t attached to a bank account in the first place.  Hence another reason credit is better than debit cards for business.

5. Disputed Transactions

Credit cards allow the user to dispute fraudulent transactions or purchases where the goods were lost or damaged. The credit card company typically supports the purchaser in these types of disputes.  A debit card doesn’t provide the same protection and the decision as to whether or not the charges should be reversed is left to the retailer.

The Emburse Advantage

Emburse has introduced credit cards to their line of expense management tools to take advantage of the benefits such cards can provide.  The Emburse system uses built in expense management and budgeting tools to streamline the purchasing processes in your company.  Contact Emburse today for a free demo.

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