Last Updated: February 16, 2024, 12:12 pm by TRUiC Team


As you start to consider obtaining a credit card for your business, you’ll inevitably come across the term charge card in addition to the expected credit card. While you can use both types of cards to make purchases, they function very differently.

You may find one of these cards much more beneficial than the other. To help you make an informed decision, we researched the four main differences between business charge cards and business credit cards. Read on to learn about these key differences.

A man trying to decide between a business credit card and a business charge card
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Recommended: Looking for more options? Learn more about these small business credit cards on our Top Best Small Business Credit Cards of 2024.


The first area in which charge cards and credit cards differ involves how much you can spend. With credit cards, financial institutions assign a credit limit based on your credit history, debt-to-credit ratio, and overall creditworthiness. Cardholders cannot exceed their assigned credit limit and limits rarely change.

Business charge cards, on the other hand, have no preset credit or spending limit. This doesn’t mean you can spend as much as you want at all times. Charge cards instead allow your credit limit to change based on a number of factors, such as credit history, finances, payment history, and usage. Cardholders can check their current limit before making a purchase and immediately find out if their creditor will approve a charge.  

Business owners should consider the type of purchases they want to make with a charge or credit card and how a spending limit might impact their ability to make those purchases.


The monthly payment requirements of business credit cards and business charge cards also differ greatly. When you use a credit card, you receive a monthly bill and you must pay the minimum amount listed on your bill. You can choose to pay more than the minimum amount, but that’s up to you. Any remaining balance will accrue interest and carry over into your next monthly statement.

With a business charge card, you must pay your full statement balance every month. If you fail to pay your balance in full by the due date, your creditor will assess a late payment fee and may freeze your card until you pay the remaining amount.

Business owners should examine their cash flow and try to determine if they expect to ever face a situation in which they couldn’t pay their full balance within a month. If you can see a lean month in your future or if you plan to make a sizeable purchase you’ll need to pay off over several months, then a business credit card might be the better option.


Because you pay your full balance every month, there’s no interest associated with business charge cards. While some business charge cards now allow cardholders to pay off balances over time, these balances include their own terms and cardholders pay them separately.

Business credit cards, on the other hand, charge interest in the form of an annual percentage rate (APR). The APR applies to any leftover balance after you pay your minimum payment. Your APR can vary greatly, depending on your credit and income history. Some credit cards also include a variable APR that changes based on the economy, known as the Prime Rate. In addition, if you don’t make your payments on time, most creditors will increase your APR for a specified period of time.


As previously noted, business charge cards are less available than business credit cards. American Express is one of the few companies still offering several different types of business charge cards. Unfortunately, many international businesses do not accept American Express as a form of payment. If you do a lot of international travel for your business, then a business charge card may not be the best choice.

With so few business charge cards available on the market, you also will face fewer choices in terms of benefits and rewards programs. That means a charge card may not be the right choice for your business if you want robust rewards programs and many customized options.


Determining which card is the perfect fit requires more than simply examining the pros and cons of each. As a business owner, you must carefully consider your monthly cash flow, how your business spends money, and the type of benefits or rewards you seek from a creditor.

It’s often easier to obtain a credit card, especially for business owners just starting to build their credit through secured credit cards. They’re also easier to obtain simply because there are so many credit cards on the market while very few companies still offer business charge cards. Finally, credit cards make a great choice for businesses that plan to carry a balance from month to month—something you can’t do with a charge card.

Charge cards, on the other hand, make an ideal choice for business owners who want to make large purchases without facing strict credit limits and also have great credit as well as the ability to pay their full balance each month. By researching your options, spending habits, and cash flow, you can make the best choice for your business.

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Recommended: Looking for more options? Learn more about these small business credit cards on our Top Best Small Business Credit Cards of 2024.



TRUiC has partnered with CardRatings for our coverage of credit card products. TRUiC and CardRatings may receive a commission from card issuers.