Banks Make It Hard For A Business Owner To Replace Company Credit Cards With Debit Cards. Dave Ramsey Says, 'They Won't, But They Can'

Running a business comes with its fair share of challenges, especially when trying to operate debt-free. Sean, a small-business owner from Lake Charles, Louisiana, recently called into Dave Ramsey's EntreLeadership podcast to discuss one specific struggle: his family-owned business couldn't seem to ditch their company credit cards for debit cards.

Sean and his two brothers run an environmental consulting company specializing in portable water and sewer treatment. With 15 employees and $3 million in annual revenue, they've prioritized eliminating debt. But they hit a roadblock when their national bank claimed it couldn't issue debit cards to employees unless they were signers on the account. This left Sean wondering how Dave's larger organization operated without company credit cards.

Dave's response probably surprised some listeners, as he exclaimed, "That's not true. They will not, but they can."

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Find the Right Bank

Dave explained that his business, which generates $300 million in revenue, operates without company credit cards. Instead, they use debit cards and none of their employees are signers on the account. The key, he said, is working with a regional bank instead of a national giant like Bank of America BAC or Fifth Third Bank FITB.

According to Dave, big banks often don't care about smaller businesses. "I’m a big enough fish that I can get them to do whatever the flip I want, but I don’t own the bank either, so you can find somebody that’ll do it if you want to do it."

He encouraged Sean to shop around for a bank willing to accommodate his company's goals. Dave noted that regional banks are more likely to issue debit cards without requiring all employees to be account signers.

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Why Debit Cards Are Better

Sean's desire to switch to debit cards ties directly into his goal of living debt-free and eventually achieving a zero credit score. Dave emphasized that using debit cards over credit cards doesn't just align with these goals and changes how employees think about spending.

"When employees use debit cards, they know they're spending actual money directly from the company's account," Dave explained. "It makes them more careful. It's like they're walking around with cash in an envelope. They're more cautious because they understand it's real money."

Dave added that his organization has seen noticeable changes in employee behavior since switching to debit cards. Team members are more thoughtful about expenses, whether for client lunches or other business-related charges. This cultural shift, he said, is invaluable.

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Addressing Risks

Sean worried about the risks of misuse with debit cards, but Dave pointed out that these risks also exist with credit cards. "If an employee makes unauthorized purchases, it's not fraud; it's employee misbehavior," he said. "And whether it's a credit card or a debit card, you're still responsible for what they put on it."

Dave argued that the real solution lies in choosing trustworthy employees and maintaining accountability. His team's debit card purchases are reviewed regularly and any questionable charges are addressed immediately.

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