Many small businesses rely on credit and debit cards for making regular purchases because they're easy to use and may replace the need to keep cash on hand. Along with these benefits, however, payment cards come with risks. Here are some guidelines for using business credit and debit cards safely.
Credit and debit cards both have their place in your company’s financial toolkit but, in most cases, a credit card will be a better choice for your purchases. Business debit cards lack the liability limits for fraudulent transactions that protect the use of personal debit cards, so your company may be on the hook for unauthorized debit card purchases if your bank chooses not to waive the charges.
A credit card will likely have a better reward program than a debit card. Applying rewards points or cash-back can extend the buying power of routine purchases you’d be making anyway.
With either form of card, though, it’s important to protect your physical cards and account numbers against unauthorized use or fraud. Vigilance is important because business cards may have less protection than personal cards, and businesses are unable to protect their banking accounts with credit freezes the way individuals can.
The following tips can help you mitigate the risks of your payment cards being compromised:
- Only keep as many cards open as your business needs, and carry as few as possible.
- Keep seldom used cards in a safe place.
- Keep a list of all credit card numbers and issuing companies' phone numbers in a secure place.
- If you are expecting a new or re-issued card and do not receive it, contact your bank immediately.
- Make sure new cards are activated and signed immediately after you get them.
Protecting Your Personal and Business Information
- Never write PIN numbers on cards.
- Never give credit card information over the phone unless you initiated the call.
- If a credit card statement does not arrive as expected, contact the issuing company to make sure that someone else did not change the mailing address so that they receive the statements
- Be sure to run expired cards through your shredder.
Preventing Unauthorized Use of Credit Cards
- Only have cards issued to employees that absolutely need them, and make sure card limits are set appropriately.
- Always total the receipt and draw lines through unused spaces.
- Never sign a blank charge slip.
- Keep all credit card receipts, and compare your receipts to account statements.
- Use a card that has a relatively low limit for routine spending. If the limit on the card is $1,000, for example, thieves can only spend up to $1,000.
- Use one card for online purchases. While you should always check your credit card statements for accuracy, this allows you to pay special attention to the statement for that card.
In Case of Problems
- If a credit card is lost, contact the issuing company immediately.
- If you believe a card was stolen, contact the police and issuing company immediately. Most credit card companies have a toll-free number for reporting stolen or missing cards and many provide 24-hour service.