Business charge cards are essential for running the day-to-day operations as a small business owner. Whether you’re purchasing office supplies, paying utility bills, or picking up last-minute materials to fulfill an unexpectedly large order, having a charge card at the ready makes it easy to buy the things you need. Most importantly, charge cards help you avoid muddying the water between your business and personal finances.

Keep reading to learn the difference between a charge card and a credit card, and how to go about picking the right one for your small business.

What is a business charge card?

A business charge card allows you to make purchases using credit regardless of how much money you happen to have in the bank—it’s not tied to your checking account. In this way, it functions similarly to a credit card.

Despite this similarity, though, charge cards and credit cards have two major differences. The first key difference is that while you can carry the balance on your credit card from one month to the next, a charge card’s full balance must be paid off at the end of each billing cycle. The exact duration of a cycle can vary depending on your card issuer and the exact parameters of the card you’ve selected, but it’s typically somewhere between 30 and 60 days.

A business charge card also differs from a credit card in that it has no established spending limit. This means you have access to funding without having to wait for lender approval, as you would with a credit card in the event you need to exceed your spending limit to make a major purchase.

For example, if your business needs to make purchases to complete a rush job, you can do so with a charge card without fear of exceeding any preset limits. You still need to pay the balance in full at the end of the billing cycle, but being able to spend money without limits allows you to take advantage of opportunities to quickly make that money back.

How to choose the right charge card for your business

With so many options to choose from, it can be overwhelming to determine which card is the best fit for your small business. But before you jump into the search, you need to carefully consider your financial circumstances, the way your business is run, and what exactly you want from a charge card.

Here are a few considerations to weigh:

  • Rewards rates and bonuses: While most cards come with rewards and bonuses, they’re not all created equal. The one that’s best for you will depend on your business model and spending habits. Some cards get better rewards on gas, while others are better for business owners who regularly travel for work. Carefully consider how you’ll be using your charge card before deciding which perks are best for you.
  • Annual fees: Most of the top business charge cards come with an annual fee, and some of these are higher than others. At the same time, some highly-rated cards don’t have an annual fee—you’ll want to weigh your options and decide whether a card’s benefits are worth paying a fee to enjoy.
  • Credit requirements: Many charge cards require good or excellent credit scores (between 690 and 850). If your credit score is below that range, there are other options available.

The right card for you is the one that best meets your needs and requirements as a business owner today. If your financial circumstances or credit score aren’t where you want them to be just yet, look for a card that meets you where you currently are. You can always upgrade to a card with more benefits down the road.

What are the top small business charge cards?

These are the top business charge cards for 2023 and the key considerations to keep in mind as you search:

Ramp Corporate Card

Pros:

  • No credit requirements to apply
  • No annual fees or other hidden costs
  • 1.5% cash back on all purchases you make—no limits whatsoever

Cons:

  • Businesses need to have at least $75,000 in their bank accounts to qualify
  • Individual LLCs are not eligible
  • Must be U.S.-based to apply

American Express Platinum Card

Pros:

  • 5x points on travel and 10x points at gas stations and supermarkets in the U.S.
  • Receive an annual $200 Uber credit
  • No fees for international transactions

Cons:

  • Annual fee of $550
  • You’ll earn minimal points outside the above designated categories

Capital One Spark Cash Plus

Pros:

  • No credit requirements to apply
  • 2% cash back on every purchase
  • AutoPay is available to ensure you never miss a payment

Cons:

  • Annual fee of $150
  • APR of 2.99% in the event you’re unable to pay off the full balance each cycle

Keeping a charge card in your arsenal can have a big impact on your day-to-day operations, but it’s important to get one that works for you. Carefully consider each option and ensure it’s ticking the boxes for each of the business needs you’ve identified for your company.

If you need a card that allows you to carry a balance from one month to the next, or if you need a more tightly controlled spending limit, a business charge card may not be a good fit. Consider a business credit card, prepaid credit card, or business loan instead.

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