What Is a Ghost Card? Definition, Challenges & Alternatives (2024)

DEFINITION

Ghost Card

A ghost card is a credit card number assigned to a specific department within an organization. Each department can use its ghost card repeatedly for its own business expenses. While they can help to streamline reporting, ghost cards often lack spend controls and leave the organization vulnerable to credit card fraud.

Imagine your employees come to you looking for approval to purchase some job-essential items. Instead of giving them a set budget or a prepaid debit card, you simply assign each of them a virtual card number with no spending limit. What do you think happens next?

It’s a recipe for financial disaster. This is called the “ghost card effect.”

This dilemma is more serious than a simple debate over secured vs. unsecured business credit cards. Ghost credit cards are generally connected to unsecured business credit cards, opening the company up to expenses they have no control over.

In this article, we'll explain what ghost cards are, their downsides, and why Ramp is a worthwhile alternative for business owners looking for robust spend controls and visibility.

What is a ghost card?

You’ve heard of virtual cards, debit cards, and credit cards. But what’s a ghost card? Simply put, ghost cards are credit card numbers assigned to different departments within a business. They’re similar to virtual cards in that they don’t exist in a physical, plastic card form.

However, whereas virtual cards tend to be created to make a single purchase to a specific vendor, ghost cards can be used repeatedly as a non-cash payment method for various business expenses.

Ghost credit card providers preach that itemizing expenses by specific departments is a revolutionary feature. This system expands purchasing privileges to more employees within the company, eliminating the need for expense reimbursem*nt programs. You can also issue ghost cards to suppliers, which allows them to charge the company whenever they process an order.

If everyone with a ghost card number spends responsibly and ethically, this system can streamline reporting and invoice reconciliation. Unfortunately, it often doesn't work this way. One Forbes Advisor poll reported that 33% of small businesses note credit card fraud as a major issue.

Even without fraudulent or malicious intent, humans make mistakes and sometimes overspend. Ghost cards simply don’t offer the spend controls to prevent this.

TIP

Are ghost cards the same as virtual cards?

Ghost cards and virtual cards are both digital payment methods, but they function very differently. Ghost card numbers are assigned to entire business departments and can be used repeatedly. Virtual card numbers are unique, one-off tokens generated for single purchases, which drastically improves fraud protection.

Downsides of using ghost cards for business expenses

Ghost cards have a purpose in specific situations, like helping a family member in need or granting purchasing power to someone in a remote location. They’re just not a good fit for small business expense management. Corporate cards are a better option for a variety of reasons.

Vulnerability to fraud

Assigning a credit card number to an entire department is an invitation for team members to commit credit card fraud against your company. It could be something as minor as buying their morning coffee or supplying their home with paper goods and office supplies. Your accounts payable department might not detect this with a ghost credit card. Moreover, former employees may still attempt to use their department’s ghost card even after they’ve left the company.

Higher interest rates

Ghost cards are connected to your business credit card account number. That means you’re paying interest on unpaid balances. According to WalletHub, the average interest rate on a business credit card in 2024 is 22.16% for new accounts. If you carry a balance, you’ll be paying that on every department purchase made with a ghost card.

Lack of spend controls

Small business owners don’t have the luxury of carte blanche spending power, so they shouldn’t give it to their employees. It’s impossible to manage costs without spend controls. Ghost credit cards don’t offer them, which opens your business up to hefty bills at the end of the month.

No personal accountability

Sharing a credit card number with an entire department eliminates personal accountability. That puts pressure on the department head to monitor individual purchases. Unfortunately, most ghost cards don’t give them the tools they need to do that. This means misuse of company funds may not be revealed until the next budget review and will fall solely on the department head’s shoulders.

4 alternatives to ghost cards

There are several alternatives to ghost cards that could be a fit for your business. Choosing the right one involves evaluating how many purchases are made each reporting period, how many people are involved in purchasing and expenses, and the size of your business. Here are some of your options:

1. Corporate cards

Corporate cards come with spend control features, and many of them allow you to spin up unlimited virtual cards for ease of use. With a ghost card, the company assigns one credit card number to an entire department. That number is attached to the main business credit card. With corporate cards, you can itemize expenses by user and set expense limits at the individual card level. Modern corporate cards can even flag non-compliant spending automatically.

Discover Ramp's corporate card for modern finance

Learn more

What Is a Ghost Card? Definition, Challenges & Alternatives (1)

2. Procurement cards

A procurement card (or p-card) is a corporate charge card issued to employees for small expenses that don’t need to go through a procurement process. They’re unique to the individual employee so that expenses can be tracked. Procurement cards are good for small businesses because you can set spending limits and help individual employees keep their expenses down.

3. Business credit cards

Business credit cards charge interest—but not if you pay the full balance off each month. They’re a good choice for sole proprietors and entrepreneurs who don’t need to monitor spending across multiple employees. Plus, they generally offer rewards programs you can use for travel or meal expenses.

4. Debit cards

A debit card works like a credit card but has a spending limit set by a preloaded balance. Many companies use debit cards to control spending or fund special projects. You can load the budget for different projects as needed and “recharge” the card when necessary.

Ramp: The (best) ghost card alternative

Unlike ghost cards, Ramp’s corporate cards are a safe and secure option for businesses of any size. Spend controls are built in, and you can adjust them to fit unique situations. You can also request that users provide receipts for specific credit card payments after checkout.

Plus, our platform integrates via API to popular accounting software such as QuickBooks and Xero, and we offer a wide range of perks and pricing intelligence to help your company thrive and grow while saving money.

Ready to learn more? Explore our interactive demo.

What Is a Ghost Card? Definition, Challenges & Alternatives (2024)
Top Articles
Onepay | Payments Made Easy
5 Things to Do After Removing a Virus From Your Windows Device
Finance Minor Osu
Craigslist Lake Of Ozarks Mo
Alza Tutto Forklift
Infinite Campus Farmingdale
Rest Area Cerca De Mí
Pamibaby Telegram
Stretch limos were the ultimate status symbol. Now they're going for cheap on Craigslist.
Autorcm
Walmart Academy Core Test Questions And Answers
Grifolsplasma.com Donor-Portal
Mall At Millenia Nordstrom
Prawn Katsu (Ebi Fry)
Cadenheads Girvan 33yo & Cadenheads Ardmore 11yo
Mail Healthcare Uiowa
Michael W Smith Declaration Of Independence
Can Halloween Candy Go Bad?
Wisconsin Volleyball Team Boobs Uncensored
122105278
Projectxyz Employee Portal
Avidxchange Cashflow Manager Login
Lolalytics Aram
Spider Man Wiki Spider Man
Terrorist Usually Avoid Tourist Locations
In Legislative Terms A Bill Is A Proposal Weegy
Family Dollar Distribution Center Joliet Photos
Clausen's Car Wash
Public Policy 101 Icivics Answer Key
Vip Market Vetsource
Results, presentations and reports
Today Was A Good Day With Lyrics
Mexican restaurant, butcher shop in El Paso receive low inspection scores: See the list
Skip The Strip And Head To These Unique Hidden Gems In Las Vegas - Explore
Biggerlifestyles
Estate Sales Net Grand Rapids
303-615-0055
702-762-8469
Baptist Medical Center Yazoo Photos
Honeybee: Classification, Morphology, Types, and Lifecycle
511PA
Steven Batash Md Pc Photos
American Pie Band Camp Parents Guide
Mychart Kki
Full Cast Of Red
Smithfield Stamp Okta Login
Obituaries | Elhatton's Funeral Home Ltd.
Albert Heijn folder | Deze Week + Volgende Week
250 Points Standings
Lake Wales Fl Craigslist
Glencoe Algebra 2 Chapter 3 Answer Key Pdf
Latest Posts
Article information

Author: Ouida Strosin DO

Last Updated:

Views: 5588

Rating: 4.6 / 5 (56 voted)

Reviews: 87% of readers found this page helpful

Author information

Name: Ouida Strosin DO

Birthday: 1995-04-27

Address: Suite 927 930 Kilback Radial, Candidaville, TN 87795

Phone: +8561498978366

Job: Legacy Manufacturing Specialist

Hobby: Singing, Mountain biking, Water sports, Water sports, Taxidermy, Polo, Pet

Introduction: My name is Ouida Strosin DO, I am a precious, combative, spotless, modern, spotless, beautiful, precious person who loves writing and wants to share my knowledge and understanding with you.