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Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Purchasing Card — Everything A Procurement Professional Should Know

Key takeaways

  • Purchasing card refers to a type of commercial card used for small purchases.
  • Purchasing cards make small, immediate business purchases bypassing drawn-out approval procedures.
  • Corporate credit cards allow balance transfers and comprehensive transaction information. P-cards demand full payment of the outstanding balance each month.

In this modern-day, we buy things conveniently using physical or virtual cards. However, there are many types of cards. Have you ever heard of purchasing cards? I am sure that only a few are familiar with this term as we mostly use debit and credit cards. 

For this article, we will discuss what a purchasing card is. We will check how it works and its benefits and disadvantages in every business. 

After this article, you will know how to use purchasing cards. You will also determine if the purchasing card is the payment tool that suits your business. So what are we waiting for, let’s start!

Purchasing Card

The purchasing card is a type of commercial card that employees use to purchase materials in the name of the company. It is also known as procurement card, p-card, and charge cards in the business field. 

A purchasing card is commonly used for purchasing things that are too small to include in the purchasing order. It is efficient for smaller transactions as it allows the employees to bypass the approval process. The approval process takes several days or even a week, which is why this is helpful for employees. 

A purchasing card is beneficial for businesses that make small purchases. It is also beneficial to use when a company does not want to give each employee their own card. However, the business must pay the card issuer in full each month at a minimum.

Difference betweena Purchasing Card and Corporate Credit Card

Both cards are commercial cards and are used in business transactions. But both cards have a fair share of their own uniqueness. The table below will show their difference.

Purchasing Card
1. The balance must be paid in full at the end of the billing cycle
2. Often used for small purchases
3. Transaction information is not that detailed
4. Commonly either prepaid or debit charge cards
Corporate Credit Card
1. The balance can be carried into the next or further billing cycle.
2. Usually for larger purchases
3. Provide more detailed transaction information and shows spending by category
4. Operate with credit to extend their working capital

Advantages of Purchasing Cards

The name “purchasing card,” already implies that it’s an advantage but here is a list of its advantages according to its intended uses.

1. Control over the company’s expenditures

The purchasing cards allow you to set a spending limit per card and create a list of approved vendors. Also, most charge card businesses have a dashboard component that gives you access to a digital trail of transactions. This allows you to monitor the purchases of your employees.

2. Streamlines the purchasing process

P-cards are usually used in small transactions. This is why employees can get what they need in an instant. It enables employees to skip the purchase order process which gives them an advantage.

3. Saves time and money

Due to the nature of p-cards being a digital transaction, it saves more money than a paper-invoiced system. It also saves time by allowing employees to pay instantly rather than paying in cash.

4. Reduce the need for reimbursements

P-cards are used for small transactions and the purchases are in the name of the company. Employees do not need to worry about spending their funds and later being reimbursed by the company. Also, the finance and accounting department saves more time in the disadvantages of spending processing the expense reports. 

Disadvantages of Purchasing Cards

Purchasing cards have disadvantages as well. Listed below are some of these that you should watch out for.

1. Limited visibility

Purchasing card transactions take several days to appear after they happen. It may be faster for the purchasing order process but it lacks the speed of corporate credit cards. Corporate credit cards show the transactions right as it is being made.

2. Possibility of misuse

There is a potential misuse due to the time it takes the transactions to appear. A delay in the purchase statement means that some spending may not be discovered. Especially when it is out of the business expense. The damage may be irreversible once it has been discovered due to the delay.

3. Incomplete cannot data

Most purchasing cards cannot show reports on expenses. It does not show how much they have spent versus how much budget it has. This may interrupt and cause unclear data to be used for spending analysis. 

Types of Debit-based Commercial Cards

There isn’t one type of purchasing card but don’t worry, we’ll help you navigate the different types.

1. Corporate Card

This is also known as a travel card. It is commonly used for the entertainment and travel purposes of an organization’s employees.

2. One Card

This commercial card is typically used for business-to-business purchases and travel and entertainment expenses.

3. Fleet Card

This type of card is used by organizations to pay for their vehicle expenses. This includes fuel, maintenance, and repair.

4. Prepaid Card

This commercial card is debit-based. It allows the user to pay now versus later as transaction amounts are already deducted from a funded account.

5. Business Card

This is similar to the corporate card but is commonly issued for businesses with fewer employees. 


In the realm of modern transactions, where convenience is key, purchasing cards emerge as a valuable tool for businesses. Often overshadowed by more commonly known debit and credit cards, the purchasing card, or p-card, plays a crucial role in streamlining small-scale purchases for companies.

A purchasing card’s advantages include enhanced expenditure control, streamlined purchasing processes, and cost and time savings. However, challenges such as limited visibility, potential misuse, and incomplete data must be acknowledged.

By distinguishing purchasing cards from corporate credit cards and exploring various types of debit-based commercial cards, businesses can make informed decisions on whether to integrate this tool into their financial arsenal.

As you delve into the specifics of purchasing cards, you’ll equip yourself to navigate the intricacies of this payment method, determining its suitability for your business needs.

Frequentlyasked questions

What is a purchasing card?

A purchasing card is a type of commercial card that is commonly used for small transactions.

Is it beneficial for business?

Yes! Companies save 77% savings in admin costs according to a published report made by Citi and Visa. This is because they have switched from a paper-based system to a digital P-card system.

What commercial card should I use?

This depends on the purpose of your business. If it is for small transactions, then you should go for purchasing cards.

About the author

My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

Marijn Overvest Procurement Tactics