Warm Card: What It Is, How It Works, Example

What Is a Warm Card?

A warm card is a bank card that provides restricted access to a business account. It is given to an employee who needs limited access to a company’s financial accounts. These cards allow deposits but not withdrawals, reducing the risk of theft.

Key Takeaways

• A warm, or "deposit-only," card is a bank card used by businesses to allow their employees to make deposits.
• Warm cards typically only allow the employee to make deposits, while prohibiting withdrawals.
• Warm cards are used by corporations to enable necessary transactions while reducing the risk of theft or fraud.

Understanding Warm Cards

Warm cards are used by businesses to minimize the risk of fraud or theft. Employees who make bank deposits can be given warm cards that provide the necessary access. By blocking withdrawals, warm cards eliminate the risk of theft by employees.

Businesses also have other security measures, such as multi-factor authentication or complex passwords. As online fraud continues to grow, businesses combine these online methods with physical measures like warm cards.

Warm cards differ from debit cards as they generally only allow deposits and are specific to business customers. Debit cards allow transfers between accounts, while warm cards are limited to specified accounts.

As online fraud has increased, businesses have had to combine physical measures like warm cards with other security measures like multi-factor authentication or complicated passwords.

Example of a Warm Card

To illustrate how warm cards work, consider the example of a chain of coffee shops. The owner issues warm cards to the store managers responsible for depositing cash from customers. The warm cards are connected to a company bank account for deposits only, effectively insuring against fraud or theft.

Unlike credit cards, warm cards do not provide borrowing capacity or affect personal credit scores.

What’s Another Name for a Warm Card?

Warm cards are sometimes called "deposit-only" cards by banks and business customers.

What Are the Main Benefits of a Warm Card?

Warm cards provide fraud protection and convenience. They allow employees to make deposits but restrict spending with them, preventing fraud and personal purchases. They also allow owners to delegate cash deposits to employees without concern about fraud or theft.

How Can You Get a Warm Card?

Warm cards are relatively easy to obtain from financial institutions. You can request a warm card by going to the bank branch, calling your bank, or accessing the card through their mobile banking app.

The Bottom Line

A warm card is a bank card used by businesses to allow employees to make deposits. It reduces the risk of theft or fraud and increases convenience for owners by delegating cash deposits to employees.