Updated: November 3, 2024
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Looking for the best business charge cards to manage your company's expenses? While you may be familiar with traditional credit cards, business charge cards offer a unique set of features tailored to your entrepreneurial needs.
We'll walk you through what a business charge card is, how it differs from a business credit card, and the pros and cons you should consider. We'll also give you actionable tips on comparing options and maximizing the benefits of your chosen card.
Why You Can Trust Our List
To ensure that we provide our readers with the most accurate and up-to-date information, experts at MoneyGeek collect 57 data points from different sources, such as the Consumer Financial Protection Bureau, card issuer websites and our various partners. We rely on our unique in-house ranking methodology to select the best business credit cards, and our model assigns specific percentages to different parameters such as the annual fee, welcome offer, rewards rates, APR, foreign transaction fees and more.
Moneygeek.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
Moneygeek.com credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
Charge cards offer generous flexibility with making large purchases, but business owners need to be aware that the balance must be paid off in full each month. Look for “pay over time” offers if you need extra time to pay off your charges. — Lee Huffman, credit card expert at BaldThoughts.com.
A business charge card is a specialized financial tool for companies and entrepreneurs. Unlike a standard business credit card, a charge card requires you to pay off the entire balance each month. There's no revolving credit, meaning you can't carry a balance over to the next billing cycle without incurring hefty fees.
This unique feature helps businesses manage cash flow more efficiently. You'll know that at the end of each month, the slate will be wiped clean. Additionally, many business charge cards offer perks like travel rewards, cash back and detailed expense reporting, making them a valuable asset for growing businesses. So, a business charge card could be your best bet if you're looking for a card that combines flexibility with financial discipline.
When considering a business charge card, weighing the benefits against the drawbacks is crucial. Knowing the pros and cons can guide you in making the right financial decision for your company.
Carefully evaluate your business's financial capabilities and needs to decide whether a charge card is right for you.
Both business charge cards and business credit cards can be useful for managing company expenses, but they have key differences that make them suitable for different financial strategies. Here's how they stack up:
Business credit cards allow you to carry a balance from month to month, subject to interest. On the other hand, business charge cards require full payment of the balance each month. If you don't, you may end up paying high penalties.
Business charge cards often don't have preset spending limits, providing you with greater financial flexibility. Business credit cards typically have set credit limits, which could restrict your purchasing power in certain situations.
Since your issuer expects you to pay off the balance monthly on a charge card, there's no ongoing interest rate to consider. Business credit cards often come with varying interest rates that can add to your debt if not managed properly.
Choosing the right business charge card can be a game-changer for your financial management. Here's a checklist to help you compare different cards and find the one that fits your business needs like a glove.
Check the fee structure
Don't overlook the annual fees, late fees or any other charges associated with the card. While some cards may offer zero annual fees as an introductory offer, others may have hefty costs that could outweigh the benefits you gain.
Assess rewards and perks
Consider the value of rewards and perks like cash back, travel miles or expense tracking features. Some cards offer industry-specific rewards that might be more valuable for your type of business.
Look at spending limits
Although many business charge cards don't have pre-set spending limits, some impose certain restrictions based on your payment history and financial standing. Make sure the card offers enough spending flexibility for your business needs.
Consider additional card features
Check for extra features like fraud protection, purchase protection or travel insurance. These added security measures can be a lifesaver in emergency situations and add value to the card.
Examine foreign transaction fees
If your business operates internationally or you find yourself traveling abroad frequently, look for a card that offers low or no foreign transaction fees. This could save you a considerable amount of money in the long run.
We've equipped you with the information you need to make an informed decision about the best business charge cards for your needs. From understanding the key differences between charge and credit cards to maximizing your card's benefits, you're well on your way to smarter financial management.
Next, consider your business needs and financial goals to narrow down your options. Don't hesitate to contact card issuers for more details or clarification on any important features.
Exploring your options for the best business charge cards? We know it can be a complex landscape. That's why we've compiled this FAQ section to tackle some of the most common questions and simplify your decision.
A business charge card requires you to pay off the full balance each month, whereas a business credit card allows you to carry a balance over time. Charge cards often come with more premium rewards and no pre-set spending limits. However, failing to pay off the full balance each month can result in steep fees.
Yes, but it's a bit different than with a business credit card. Some charge card providers report your activity to credit bureaus, which can help build your business credit history. However, because you're required to pay off the full balance each month, the impact may be less significant compared to carrying a balance on a credit card.
While not having a preset spending limit offers flexibility, it doesn't mean unlimited spending. Factors such as your payment history and financial stability determine your spending capacity. Exceeding this unstated limit could result in declined transactions or penalties.
Most business charge cards come with an annual fee, which can vary widely. It's important to weigh this cost against the benefits and rewards the card offers to determine if it's a good fit for your business. Some cards may waive the annual fee for the first year as an introductory offer.
To get the most out of your business charge card, focus on optimizing the rewards program and using the expense tracking tools provided. Paying the full balance on time each month will help you avoid late fees and maintain good standing with the card issuer. Make sure to leverage additional perks like travel benefits or shopping protections.
About Doug Milnes, CFA
Doug Milnes is a CFA charter holder with over 10 years of experience in corporate finance and the Head of Credit Cards at MoneyGeek. Formerly, he performed valuations for Duff and Phelps and financial planning and analysis for various companies. His analysis has been cited by U.S. News and World Report, The Hill, the Los Angeles Times, The New York Times and many other outlets.
Milnes holds a master’s degree in data science from Northwestern University. He geeks out on helping people feel on top of their credit card use, from managing debt to optimizing rewards.
