So how are they different?
The biggest difference comes down to repayment. With a charge card, you have to repay your entire balance―in full―each billing cycle (generally one month). A business credit card, on the other hand, gives you the option to carry a balance from month to month and billing cycle to billing cycle, so long as you make minimum payments.
That means that you need to budget much more carefully when you use a charge card than a credit card. Otherwise, you might have trouble paying your full charge card balance at the end of your billing cycle―and that could lead to your account getting closed.
But it also means that credit cards can end up costing you a lot more. Since you pay off your charge card each month, you don’t have to worry about racking up lots of interest.
If you don’t pay your credit card balance in full, however, you’ll quickly start owing interest―and the APR (annual percentage rate) on credit cards can be painfully high.
Of course, you can always choose to pay off your business credit card’s outstanding balance in full each month (and we recommend you do so). Only a business charge card requires you to do so, though.