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What is the difference between a P-Card vs Credit Card

Jumaane Dyson's Profile

I called Bank of America and the representative stated that she never heard of a P-Card.

Answers

Kevin Bailey
Title: President
Company: Logical Processing Solutions
(President, Logical Processing Solutions) |

A P-Card is typically a purchase card issued to employees of a company to make purchases at selected businesses. The company issuing the cards can limit their use to certain SIC businesses,. i.e. a trucking firm may give drivers P-cards that can only be used at gasoline stations etc. but will not work if the driver tries to use it at department store. For the merchant who accepts these cards the interchange rate and processing fee is higher than a normal credit card. However the the card companies do a have special interchange for what is called "Large ticket transaction" . Your credit card processor should be able to give you more information on the cost and processing procedures.

Sarah Jackson
Title: Associate Editor
Company: Proformative
(Associate Editor, Proformative) |

Proformative offers 400+ business courses with free CPE, many on purchasing.

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

The only other thing I would add is that you can put dollar limits on the P-Card for the month and for certain transactions.

Lynn Fountain
Title: MBA CGMA CRMA, Past Chief Audit Executiv..
Company: Business Consultant
LinkedIn Profile
(MBA CGMA CRMA, Past Chief Audit Executive, Business Consultant) |

You can also limit transactions on company sponsored credit cards. When companies contract with vendors to obtain either a P-Card for purchasing of certain items or credit cards for travel and entertainment, there are blocks that are called SIC code blocks. So for instance if you don't want your employees purchasing liquor on company cards, a block can be placed on the card. You can also place dollar limits on credit cards that are used for T&E.

Robert Richardson
Title: Finance Manager
Company: Akzo Nobel
(Finance Manager, Akzo Nobel) |

we have even placed dollar limits on individuals using company credit cards that have had issues turning in expense reports or have past credit issues. We now require, with few exceptions, POs for all purchases. One major exception would be travel related expenses which we capture in a separate system. Additionally normally over $5,000 would be a key for capitalizing as oppose to expensing an item.

Ernie Humphrey CTP
Title: CEO & COO
Company: Treasury Careers
LinkedIn Profile
(CEO & COO, Treasury Careers) |

Back in my Treasury days restrictions on P-card purchases could be based on Merchant Classification Codes, and limits on individual P-cards could be managed by multiple people within an organization. It was possible to automate journal entries based on transactions, and entries could also also be set up for approval before being posted.

Companies used to get big rebates based on spending levels so they used to try and clear high dollar accounts payable items using a P-card. P-cards used to be especially valuable for manufacturing companies who ran multiple shifts and could not wait to have small dollar POs go though an approval process (and the cost of a manual PO process can be pretty steep).

Kim Zarraga
Title: Accounting Manager
Company: Bio-Rad Laboratories
(Accounting Manager, Bio-Rad Laboratories) |

For us liability is a difference. For the P-Card the Company is liable and for our T&E cards, the employee is liable.

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

It is surprising the BofA representative didn't know. Is he/she a business rep? That could make the difference. If you are talking to a retail rep then they may not know. BofA does have a purchasing card program, but it is housed in their corporate services area. AMEX also has one if you want to compare programs.

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