When it’s time to pay the bill at your favorite local restaurant or make an online purchase for critical software to run your small business, which is the best way to pay: Debit or Credit?
Using your company’s debit card may be convenient, especially if you use your online bank balance as your register, however, is that a best practice?
Almost all debit cards have a major credit card company insignia (Visa© or MasterCard©) on them which allows payment networks to process transactions through the credit card system, however, the cash comes immediately and directly out of your company’s bank account. Giving your card to a waiter or on a website comes with the risk that the account number on the card may be compromised, and if it gets in the wrong hands, the perpetrator may have instant access to all your cash.
It is more difficult to recover funds stolen from a bank account by using a debit card than it is to get fraud protection from a credit card company. Using a company credit card allows you to charge back any questionable transactions as long as you provide the credit card company the proper information required during their investigation of that fraudulent charge.
A debit card does not have this level of protection and therefore, we at LK&A recommended that you obtain a company credit card, use it for business use only to restrict the variety of accesses to the card’s vital information, and watch the transactions coming through on a frequent basis.
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