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What credit card is best for your small business?

3 min read


This Spotlight on Business Credit Cards is brought to you by American Express OPEN, the leading issuer of small business credit cards and charge cards in the U.S. OPEN offers business owners products and services to help them run and grow their businesses.

For small-business owners, having a charge card or credit card designated just for business expenses can provide valuable rewards and make it easy to separate company spending from personal spending. But knowing which type of card to pick can be a challenge. Knowing the important differences between credit cards and charge cards can help you get what you need for your business while staying out of debt and earning maximum rewards.

When choosing a card for your business, think about:

How much you will be able to pay each month? The main different between credit cards and charge cards is that a charge card must be paid off in full at the end of each month. Money Crashers’ Jason Steele likens charge cards to bar tabs and writes that “credit cards, on the other hand, function more like loans.” Cardholders can run up a balance on a credit card and pay interest on the money owed. Paying the amount in full each month would result in no accumulated interest, meaning the card would function like a charge card.

The potential consequences. Using a credit card for your small-business expenses can allow you to purchase things your business needs now, but might not be able to pay for. As long as you keep to your payment schedule and don’t overestimate the money that your business will bring in, a small business credit card can be a winning choice.

But if you worry that the potential to buy things you can’t afford will turn you into a big spender — and saddle you with some big debt — a charge card can help keep your spending in check. However, “charge cards do not have credit limits, so theoretically you can charge as much as you want, until the issuer decides enough is enough,” writes John Ulzheimer of

So make sure you have the means to pay it all off at the end of the month. Charge cards can come with steep penalties for missed payments, including the cancellation of your card. Also be advised that charge cards often require an annual fee, something that credit cards rarely charge.

The rewards you can reap. Both types of cards offer the potential for great rewards such as cash back on certain purchases or points that you can cash in for merchandise or gift cards. In Steele’s rundown of the 10 best small-business credit cards, half of his picks are associated with an airline, hotel or other business that offers special rewards to cardholders.

Pick a card that offers rewards your business can benefit from, and don’t neglect to check the fine print. “A company that does a lot of travel may want airline-mile rewards. But review the list of exclusions since some programs are so restrictive that you may not be able to benefit from them,” the Wall Street Journal warns in its how-to guide on picking the best credit card for your business.

Once you decide which route to take, there are still a lot of choices to make when it comes to choosing the right card. Comparison sites such as Card Hub or Credit Card Assist let you view all your options and pick the best card for your business.