P-cards vs credit cards: What’s the difference?

There’s no shortage of payment options for managing business spend on the market – but not all cards are created equal. Purchasing cards (P-cards) and credit cards are two of the most popular tools companies use to handle day-to-day spend.

Whilst they may look similar, they serve different purposes behind the scenes – and when it comes to managing everyday spend, P-cards have a lot to offer that credit cards don’t.

In this article, we’ll break down what P-cards and credit cards are, how they work and where each one shines. More importantly, we’ll explore why P-cards are becoming the go-to choice for modern businesses looking to stay in control of operational spend, reduce admin headaches and gain real-time visibility into where their money’s going.

Key takeaways:

• P-cards and credit cards both let businesses pay for goods and services, but P-cards offer tighter controls, real-time reporting and are built for day-to-day operational spend.
• Credit cards are great for occasional, flexible expenses. They’re handy for travel, client entertainment or one-off purchases, but can be harder to control and reconcile.
• P-cards give finance teams more control and visibility. With customisable limits, spend policies and instant transaction tracking, P-cards help prevent off-policy spend and reduce admin.
• For everyday spend management, P-cards are the smarter choice. They simplify processes, cut paperwork, improve oversight and help businesses stay agile whilst keeping spend in check.

What is a purchasing card (P-card)?

A purchasing card, or P-card, is a type of company-issued payment card that allows employees to buy goods and services for their organisation. Employees can make these purchases without having to go through the traditional purchase order and invoice process.

With P-cards, the company can put restrictions on each individual card to control what’s purchased, limit transaction amounts, monthly spending and what vendors the card can be used at.

In other words, P-cards come with a level of control and visibility into company spend that’s essential for any company looking to keep the business agile and moving forwards whilst staying on top of where their money is going.

Read more about purchasing cards here: Purchasing cards: Everything you need to know

What is a credit card?

A credit card allows the cardholder – in this case, the business – to borrow funds up to a set credit limit to make purchases. In other words, you buy it now, but pay for it later.

Every time a purchase is made using the card, that amount gets added to the balance owed. At the end of each month, the business receives a statement showing how much has been spent, how much must be paid back and when it’s due.

At this point, the business has a couple of options. They can:

• Pay the full balance – no interest accrued.
• Pay part of it (at least the minimum) – if the balance carries over to the next month, interest is accrued on the outstanding amount.

Credit cards come with a credit limit: the maximum amount the company can borrow on the card. If the balance exceeds the limit, any additional transactions will typically be declined – and in some cases, the business may incur over-limit fees.

What’s the difference between a P-card and a credit card?

P-cards and credit cards both let businesses pay for goods and services, but they serve different purposes and are managed in different ways. Here’s how they compare:

Purpose and use

P-cards are designed for business-related operational purchases – typically lower-value, high-frequency transactions like office supplies, software subscriptions or travel bookings.

Credit cards, on the other hand, are more flexible and can be used for a variety of expenses, including larger or unexpected purchases. For example, they might be issued to cover travel, client entertainment or general operational expenses.

Spend controls

P-cards offer more granular controls. You can set limits by transaction type, supplier category or value – and that reduces the risk of misuse.

Credit cards typically have a set overall credit limit and fewer built-in restrictions on where and how they’re used. This can be valuable for certain types of purchases, but also poses some challenges in terms of managing spend.

Approval and reconciliation

P-cards often require pre-authorisation or purchase approval workflows, and transactions are usually tracked through integrated expense or procurement systems for easier reconciliation.

Credit cards rely more on post-purchase approvals via monthly statements – there’s less upfront control over individual transactions.

Reporting and oversight

P-cards provide detailed, real-time reporting, making it easier for finance teams to track operational spending and spot issues early.

Credit cards generally offer standard monthly statements and reporting, which don’t always integrate closely with procurement or spend management platforms.

Cash flow impact

Both P-cards and credit cards help manage cash flow by delaying outflows until the statement period ends. However, P-cards are usually tied to a centralised account and integrated repayment process.

Credit cards, meanwhile, may carry balances over time with interest charged on unpaid amounts, which can lead to higher costs if they aren’t managed carefully.

To summarise, here’s a brief overview of the differences between P-cards and credit cards:

P-cards vs credit cards: Which is better for business spend?

Both P-cards and credit cards have their place in business finance. With that being said, they’re built for different priorities – and when it comes to everyday spend management, P-cards generally take the lead.

Credit cards are good for larger, occasional or unpredictable expenses. They offer flexibility and can be handy for travel, client entertainment or one-off business purchases. However, they often lack the detailed controls and real-time reporting finance teams need to manage operational spend.

P-cards, on the other hand, are designed specifically for day-to-day business expenses. They offer tighter spend control, more granular transaction limits and better integration with procurement and expense management systems, all of which makes it easier to stay on top of spend, enforce policies and reduce admin headaches.

In short, here’s why P-cards are better for everyday business spend:

• Precise limits by supplier, category and purchase type
• Instant visibility into spending as it happens
• Fast-track reconciliation and approvals – no paperwork pileups
• Cut down on manual purchase raiders and clunky expense claims
• Stop rogue, off-policy purchases before they happen

In other words, if you’re looking to manage operational spend more efficiently, improve oversight and make things easier for your finance team, P-cards are the smarter, more effective choice for everyday business spend.

Take purchasing cards to the next level with Pleo

When it comes to managing everyday business spend, Pleo’s corporate cards take the best of P-cards and make them smarter, simpler and more flexible. Employees can pay for what they need, when they need it. No more reimbursements – no more clunky expense reports.

Streamline payments, cut admin and free up valuable time for your people and finance team. Plus, you can assign cards to individuals or departments to keep spend secure and budgets in check.

With customisable spending policies, department budgets and multi-step approvals, you’re always in control. Track expenses in real time, prevent overspending before it happens and get instant visibility with data that syncs straight to your accounting system, making planning, forecasting and reporting both faster and smarter.

The best part? You can save money, too. Pleo’s detailed analytics give you clear insights into how company funds are being spent, where you can cut costs and how to get the most out of your expense management.

Make smarter decisions, improve your ROI – and avoid nasty surprises.