Business Credit Cards vs. Charge Cards
Unlock new potential by using business cards to optimize your cash flow and benefit your business.
Business Charge Cards and Small Business Credit Cards are useful tools that allow businesses to improve cash flow and earn rewards from company purchases and expenses. Decide what card is right for your company by comparing the features and benefits.
What is a business charge card?
A business charge card has no pre-set limit1 on how much you can spend and does not charge interest if you pay your balance in full each billing period. Business charge cards give you the opportunity to maximize your cash flow by offering up to 55 interest-free days.2 You cannot make unlimited purchases on the card, but your business can build up a good spending and payment history over time to increase the amount you’re able to put on the card. If you can easily pay off your balance in full each month and prefer a flexible spending limit, a charge card can give you the ability to make larger purchases.
What is a business credit card?
A business credit card gives your company a set amount of money that can be spent each billing period. You can either pay off your balance in full every statement period or carry a balance to manage your company cash flow.3 If you are looking to improve your cash flow and want to pay off your expenses over time, then your company may benefit the most from a credit card with revolving credit.
Key Differences Between Business Charge Cards and Business Credit Cards
American Express® Business Credit Cards and Charge Cards offer a convenient way to improve your business cash flow and earn rewards from company purchases and expenses. Decide which card is right for your company by comparing the features and benefits mentioned in the below list.
Feature
|
Business Charge Card
|
Business Credit Card
|
| Pre-set spending limit1 |
 |
 |
| Interest charges | Up to 55 days interest free* | Subject to interest rates if you pay what you owe after the billing period ends2 |
| Required payment | Pay at least the minimum required amount each billing period3 | Pay at least the minimum required amount each billing period3 |
| Rewards | |
|
When comparing charge cards and credit cards, both can offer useful benefits. The right card for your business depends on your spending and payment history, the buying power you have, and your company’s financial health.
If you’re still unsure which card is right for your business, Call us at 1-877-891-0821 Monday to Friday, 9am – 5pm EST, or request a call back.
Frequently Asked Questions
What is the major difference between charge cards and credit cards?
Charge cards require cardholders to pay off their balance in full each month, and do not come with a pre-set spending limit.1 With a credit card, you only have to pay the minimum required amount each month and have revolving credit, which means you can carry your balance over to the next billing period.3 You will receive a pre-set spending limit on your credit card based on your financial information.
What happens if you don’t pay off a charge card?
For a charge card, the balance must always be paid in full each month. A 30% annual interest rate applies to balances not paid in full. Payments must be received and processed by the date of the next monthly statement to avoid interest charges.
®: Used by Amex Bank of Canada under license from American Express
*This charge Card has both Due in Full and Flexible Payment Option balances. All Due in Full balances must be paid each month. Interest rate of 30% applies to each delinquent Due in Full charge. The Preferred rate of 21.99% applies to your Flexible Payment Option balance. If you have 2 separate Missed Payments in a 12 month period, the Flexible Payment Option rate for your account will be 25.99%. If you have 3 or more separate Missed Payments in a 12 month period, the Flexible Payment Option rate will be 28.99%. These rates are effective from the day account is opened.
The interest grace period from the closing date of the current statement to the closing date of the next statement varies and will be 28, 29, 30, or 31 days depending on the number of days in the calendar month in which the current closing date occurs. The number of interest free days varies based on a variety of factors, including when charges are posted to your account, whether your account is in good standing, and the closing date of your statement. Interest will not be charged on transactions and you will have an interest grace period of up to 31 days from the closing date on your statement if every month we receive payment in FULL by the next statement date after the transaction first appeared on your billing statement. Payment in FULL means payment of the total new balance shown on your statement which is made up of all charges to your account (including purchases, funds advances, fees and other charges) up to the closing date.
- No Pre-Set Spending Limit on purchases does not mean unlimited spending. Your purchases are approved based on a variety of factors, including your credit history, account history, and personal resources. Proof of resources and security may be required.
- Subject to approval. The preferred rate for purchases is 21.99% and funds advances is 21.99%. If you have Missed Payments, the applicable rates for your account will be 25.99% and/or 28.99%. See the information box included with the application for the definition of Missed Payment and which rates apply to charges on your account and other details.
- When you use your Card, you will be charged interest unless you repay the full closing balance by the Payment Due Date shown on your statement. Interest will be expressed as an annual percentage rate.