Smart spending decisions can help make your small business successful. It’s not just about what you buy, though, but also how you pay for those purchases. Not all payment methods are equal.
There are several good reasons to consider a business charge card for your business expenses. Here’s what you need to know about business charge cards.
What Is a Business Charge Card?
A business charge card is a type of payment card that can be used wherever the specific brand of card (American Express, Mastercard or Visa, for example) is accepted.
Cardholders don’t finance purchases over months; instead balances must be paid off in full, often within one or two billing cycles and sometimes faster.
Because the cardholder can’t carry a balance, no interest is charged. However, there may be fees, including annual fees, or penalty fees.
Some charge cards offer no preset spending limit, which may be helpful if your business requires high credit limits. (This doesn’t mean you’ll be able to charge anything your business needs; issuers may limit charges deemed risky.)
Best Business Charge Cards This Year (2023)
Here are five great charge cards for your small business.
Originally the American Express card was a charge card (actually a charge coin), but Amex offers a variety of cards now to meet various business needs.* With the , you can enjoy the flexibility to pay in full each month or carry your balance for up to 60 days with no interest.
Paying early pays off: get an unlimited 1.5% Early Pay Discount on eligible charges within 10 days of your statement closing date and see the discount applied to your next statement when you pay at the least the Minimum Payment Due by the Please Pay By date.
It carries a annual fee.
This card offers advanced spending and cash management tools. . The annual fee is .
Capital One Spark Cash Plus
This business charge card from Capital One allows cardholders to earn unlimited 2% cash back on every purchase with no limits or category restrictions. Plus, earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel.
It also currently offers a sign-up bonus: Earn a one-time cash bonus of $1,200 once you spend $30,000 in the first 3 months.
There is no preset spending limit. There is a $150 annual fee that can be refunded each year when you spend at least $150,000.
*All information about the Capital One Spark Cash Plus card has been collected independently by Nav. This card is not currently available through Nav. To see available business credit cards, please visit Nav.
Ink Business Premier℠ Credit Card
This pay-in-full card offers rich rewards. Earn unlimited 2.5% total cash back on purchases of $5,000 or more and unlimited 2% cash back on all other business purchases. There is also a generous welcome offer: Earn $1,000 bonus cash back after you spend $10,000 on purchases in the first 3 months from account opening.
*All information about the Chase Ink Business Premier credit card has been collected independently by Nav. This card is not currently available through Nav. To see available business credit cards, please visit Nav.
Nav Prime Card
The Nav Prime Card* is a charge card, with no credit check or security deposit required. With your Nav Prime Card transactions are reported as a monthly tradeline, so your everyday transactions can build business credit with regular use. You’ll link your checking account for daily autopay, which helps you avoid carrying high debt.
Exclusive to Nav Prime members, the Nav Prime Card reports as your second tradeline to help improve your business’s financial health profile to unlock better financing options.
The Nav Prime Card is not available in CA, NV, ND, SD.
Are Charge Cards Good for Business?
Charge cards offer a convenient and safe way for businesses to pay for purchases. Since these cards don’t offer an underlying line of credit they can be a helpful way to avoid debt.
Business charge cards may be helpful when building a business credit history as well. Creditworthiness is important when you’re applying for small business loans, and a charge card can be one way to help improve your credit profile.
5 Reasons a Business Charge Card Helps Small Businesses
Here are five reasons why a charge card may be a good choice for small business owners.
1. Keep Spending in Check
Some business owners are nervous about using credit because they are afraid they will be tempted to run up debt. A charge card must be paid in full, making it a perfect alternative to checks or cash.
2. Fraud Protection
Business credit and charge cards offer the highest level of protection if in the case of fraud. If your checking account is compromised, you may find yourself scrambling to pay bills while you straighten out the mess.
Charge cards are considered credit cards, and they fall under the Fair Credit Billing Act which limits liability in the case of fraudulent use to $50. If your card is lost or stolen, notify your issuer immediately. They will likely replace it with a new one quickly so you can get back to business.
Plus, with a charge card or credit card, you can set up alerts to instantly inform you of purchases over a certain amount, adding another layer of fraud prevention.
3. Better Budgeting
Spread your purchases among many different payment methods (a debit card, credit card and checks, for example) and you’ll have a harder time keeping track of your business spending Sure, you can look at your accounting program to see where the money is going, but if that’s something you delegate (or procrastinate on doing) you may not realize you’re overspending until it’s too late.
Business credit cards and charge cards will often provide expense management tools and a spending summary that quickly categorizes your purchases so you can see at a glance whether your spending in a particular category is higher than you budgeted.
You can also often link your credit card to your accounting software (such as Quickbooks) for easy import of your transactions.
4. Build Business Credit
If your business charge card issuer reports activity to business credit bureaus, and you make on time payments, you can build stronger business credit scores. Of course, the latter is also true. If you miss due dates, late payments can hurt your business credit.
Use a business charge card or credit card instead of a personal credit card, and it’s also possible your personal credit scores can benefit. Most business cards are not reported to your personal credit reports unless you default. That means if you need to use your card for large purchases (inventory, supplies, business travel, etc.) you don’t have to worry about your personal credit scores dropping because those balances appear on your personal credit reports.
5. Get Rewarded
Business owners, on average, spend a lot more than individual consumers. If you use a rewards card, you can earn cash back or travel miles for your purchases.
Keep in mind that even new businesses may qualify for these cards, as long as the owner’s personal credit scores are good. Nav can help you find the best business credit cards and charge cards based on your credit scores and other factors.
What Are Some Disadvantages of Charge Cards?
The main disadvantage of business charge cards is that you can’t use them to finance purchases over time like you can with a business credit card that offers longer repayment terms. (On the other hand, there’s no risk of running up debt you can’t repay.)
If your business faces a cash flow crunch, you may want to consider a 0% intro APR business credit card for purchases you need to pay over time.
Business Charge Cards vs. Business Credit Cards
There are several differences between small business credit cards and business charge cards. Key differences to consider:
| Business Charge Cards | Business Credit Cards |
| Must pay in full, so financing is not available | Can finance purchases over time |
| Risk of debt is minimal | Easier to run up debt |
| Often offer flexible spending limits | Cardholder is approved for a specific credit limit |
| No interest since charges are paid in full | Interest rates vary, and variable APRs are common |
| Credit requirements vary | Good or excellent credit often required |
| Balance transfers not available | Some cards offer balance transfers with low introductory APRs |
Similarities Between Business Credit Cards and Business Charge Cards
Costs and benefits range widely among credit card issuers and individual card programs. You may find these similarities among business card offers:
- Personal guarantee is typically required
- Most cards available to startups, sole proprietors and established businesses that qualify
- Many cards don’t require an employer identification number; a Social Security number may be used on the application
- Rewards programs, such as travel rewards points or cash back rewards, may offer rewards on eligible purchases
- Perks such as purchase protection, extended warranties, or cell phone protection may be offered
- Free employee cards can be convenient for managing employee spending
- On time payments may help build business credit
Nav can help you find the best business credit cards and charge cards for your business, based on your business data.
*DISCLAIMER: Nav Technologies, Inc. is a financial technology company and not a bank. Banking services provided by Blue Ridge Bank, N.A., and Thread Bank, Members FDIC. The Nav Visa® Business Debit Card is issued by Blue Ridge Bank, N.A., and the Nav Prime Charge Card is issued by Thread Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa cards are accepted. Your funds are FDIC-insured up to $250,000 through Blue Ridge Bank, N.A., Member FDIC.
This article was originally written on June 20, 2016 and updated on October 27, 2023.
You can also download most charge or credit cards transactions and attach your receipt images to your accounting and bookkeeping software like QuickBooks desktop or QuickBooks Online which means you can stay on top of your spending and categorize your expenses as they occur.
Great advice, Keith. Drawing a clear line between personal and business expenses is the first thing any serious business owner should do.