Compare Business Credit Cards and Charge Cards

What are the differences between business credit cards and charge cards? Why should small business owners use a business credit card in handling their expenses? This article should give the basic idea about charge cards and credit cards for business.

Charge cards
Charge cards can also be considered as department store cards or gas station cards. These are credit cards are used only in selected establishments. Thus, instead of paying cash, the cardholder can simply charge purchases to his credit card. At the end of month, the cardholder is expected to pay all his charges completely in order to keep his card active.

Credit cards for Business
As the name suggests, business credit cards are especially offered for small business owners or entrepreneurs. Just like standard credit cards, business credit cards can be used anywhere for purchase.

A billing statement will be sent to the business credit cardholder each month. The entrepreneur may choose to pay all his charges in full or to pay only the minimum due and carry over the rest of his balance for the next billing cycle.

Aside from the monthly billing statements, business credit card companies also send quarterly or yearly account summaries to help the business owner monitor all expenses made for the past quarter or year.

Charge Cards and Business Credit Cards
Both charge cards and business credit cards can be used build business credit. As long as the credit card issuer reports your payments to the business credit bureaus, you can build your business credit history with the use of these cards.

Which ONE Is Better?
So which one is the better credit card? For those who need to build business credit but is also on a limited budget, a charge card is a good choice because balances can be paid off on a monthly basis.

However, for those who need larger credit limit to finance their business, a business credit card offers more flexibility and more options. For instance, if you need to purchase expensive equipment, charging this to your business credit card and paying for it installments will give you the chance to finance your assets without spending a large amount of cash.

Another advantage of using a business credit card is the chance to participate in its reward programs. Since entrepreneurs often spend a lot on business needs, it is so much easier to collect points and earn rewards.