Charge Cards vs. Credit Cards – Which is Best for Your Small Business?

Have you ever needed to purchase supplies or pay bills, but you had to postpone those needs while waiting for a customer to pay you first? If so, you’re not alone. Managing cashflow is an ongoing challenge for many small business owners.

Business credit cards can offer a spending cushion when small business cashflow is tight, but some small business owners don’t want to use credit and want to avoid interest payments. That’s why Business Charge Cards offer another viable option.

Charge Cards vs. Credit Cards

Many people assume “Charge Card” is simply another name for “Credit Card,” but that’s not the case. A Credit Card actually extends credit because it allows you to make purchases and pay for them over an extended time if you choose. But a Charge Card requires that you pay the bill in full every month, so there is no credit extended.

With a Charge Card, you have the option to make purchases now that you can pay for at the end of the month (or your next billing cycle). It allows you to extend your cashflow and earn valuable rewards just by making the purchases you’d make anyway.

Is a Charge Card right for you?

If you want extra time to pay for purchases without using credit or paying interest, a Charge Card may be ideal.

A Charge Card may work for you if:

• You can pay your full balance each month rather than making partial payments for several months or longer.
• You can make payments on time. Because Charge Cards don’t extend credit, there’s usually a fee for late payments.
• Value generous spending rewards and perks, especially for travel.

If you want to boost your business cashflow while remaining interest and credit free, consider using a Charge Card. Click here to learn more about the Charge Card options available from American Express. They will provide up to 54¹ days payment terms to maximise your cashflow. 

1. The maximum amount of time for a payment period on purchases is obtained only if you spend on the first day of the new statement period and repay the balance in full on the due date. Approval is subject to status and terms and conditions apply.