Charge Card vs Credit Card: 6 Key Differences You Should Know

Key Differences Between a Charge Card and a Credit Card, and How to Choose the Right One

Choosing the right card for your business isn’t just about comparing rewards, benefits, or the fine print on fees. It also requires understanding the type of card you’re applying for and the effect that decision has on how your team manages its spending.

Many applicants may not realize there’s a difference between two of the most common card options: credit cards and charge cards. At a high level, the distinction comes down to how (and when) your balance gets repaid. Credit cards allow you to extend a revolving line of credit, while charge cards require payment in full at the end of each billing cycle. Depending on which you choose, each type has its own particular advantages depending on your company’s spending habits, cash flow, and internal controls.

In this guide, we’ll break down the core differences between credit cards and charge cards. We’ll also show where each type excels, explain which types of businesses may benefit the most from each type, and highlight well-known examples from major providers. We’ll also introduce the Slash Card, a modern corporate charge card that pairs industry-leading cashback up to 2% with powerful spend controls to simplify day-to-day operations.1 Continue reading to learn more.

What is a charge card in comparison to a credit card?

Let’s start with the option you’re likely most familiar with: credit cards. A business credit card gives you a set credit limit that you can borrow against as you make purchases. Think of it like asking a penny-pinching friend to spot you at lunch; they’ll cover the bill now, but the longer you wait to pay them back, the more they’ll expect in return. With credit cards, your “friend” is the bank, and the extra cost comes in the form of interest charges.

A few key terms matter when it comes to understanding how credit cards work:

• Line of credit: A flexible borrowing arrangement that allows a cardholder to draw funds as needed up to a set limit. The amount that you borrow is expected to be paid back, plus any additional interest.
• Credit utilization ratio: Refers to how much of your credit limit you’re using each billing cycle. If you have a $10,000 limit and spend $2,000 during your billing period, then your credit utilization for that period is 20%. A cardholder’s typical credit utilization ratio is a significant factor of your credit score; most experts recommend keeping it around 30% to maximize your score, but other factors may cause this to vary.
• Credit score: A measure of your ability to repay what you borrow. While personal scores range from 300–850, business credit scores typically range from 1–100 and are tracked by credit bureaus like Dun & Bradstreet, Experian, and Equifax. When you acquire a business credit card, it’s important to register with credit bureaus in order to begin building your credit history. Strong credit scores help you qualify for higher limits, better rates, and larger financing options down the line.
• APR: The annual percentage rate, or APR, is the rate of interest you pay when you don’t pay off your full card balance at the end of a billing period. The amount that is left unpaid is called a revolving balance; carrying it into your next billing cycle accrues interest that is calculated using the APR.

Charge cards also let you borrow funds to make purchases, but they work a bit differently than their credit counterpart. Notably, a charge card does not extend a revolving line of credit. That means you can’t make a small minimum payment and roll the remaining balance into the next billing cycle. Instead, the balance must be paid in full at the end of each period.

That requirement may sound limiting, but charge cards can come with several advantages:

• You avoid the cycle of long-term debt that can build up quickly with revolving credit.
• They streamline spend management, reducing complexity for teams that handle high transaction volume or fast-moving operations.
• Many charge cards, such as the Slash card, use alternative underwriting instead of traditional credit checks, which can make them more accessible for newer companies without a lengthy payment history or those building up their credit score.
• A low-friction and easy way to pay for what your business needs.

How else are charge cards and credit cards different?

Although revolving credit is the biggest distinction between the two, the differences don’t stop there. In practice, credit cards and charge cards behave very differently in day-to-day use, and those differences can shape how a business manages cash flow, spending visibility, and operational control. Depending on your company’s size, structure, or need for flexibility, one type may feel more aligned to your business needs than another. Below are the major usage differences you’ll notice when comparing the two:

Use cases

Credit cards are often a company’s default spending tool. Employees can swipe freely, and as long as the business maintains healthy cash flow, the ability to carry a balance gives monthly budgets some breathing room. You can float expenses, take advantage of longer billing cycles, and absorb unexpected purchases without having to settle the entire balance immediately.

Charge cards play a different role. Because balances must be paid in full each cycle, businesses tend to use charge cards more intentionally. The advantage is added control; charge cards (especially modern fintech versions) can enable far more granular oversight than traditional bank-issued credit cards. With the Slash Card, for example, you can issue unlimited virtual cards, assign spending rules by team or individual employee, and adjust spending limits.

Interest charges and late fees

Credit cards come with a tradeoff: flexibility in exchange for the potential to accumulate debt. APRs commonly range from 15% to 25%, and once a balance starts carrying over, compounding interest can grow that debt much faster than expected. Consider this example: if you have a $5,000 balance at 22% APR and only pay down the $200 minimum each month, you won’t be done paying off that balance for nearly three years. During that time, you’ll pay over $1,700 in interest. That’s money that never went toward your business; it simply went toward the privilege of repaying slowly.

By requiring full repayments, charge cards can eliminate the risk of runaway debt entirely. Moreover, this model can promote healthier spending habits and help businesses build stronger credit profiles faster.

Credit limits

Credit cards come with a preset credit limit, and hitting or approaching that limit can hurt your credit utilization ratio, which is one of the most influential factors in your credit score. Even if you’re a responsible payer, high utilization signals elevated risk to lenders. Charge cards can offer significantly higher limits, and some don’t use a preset spending limit at all. This can make charge cards particularly valuable for companies that need to make large purchases up-front, handle irregular spending cycles, or need the flexibility to scale up spending quickly without damaging their credit score.

Credit score checks

Many of the most competitive charge cards today are offered by financial technology companies, which use alternative underwriting processes instead of traditional credit score checks from FICO and Experian. Slash, for example, evaluates your business’s current financial position instead of your credit history to determine whether you're approved. This can make charge cards far more accessible to early-stage companies or founders rebuilding their credit. American Express is an exception here: their corporate charge cards generally require excellent credit and more traditional underwriting.

Personal guarantees

A personal guarantee puts the individual applicant on the hook for the company’s debt if the business fails to repay it. Many business credit cards require a personal guarantee, meaning the primary account holder takes on personal risk—sometimes unknowingly. While some charge cards also use personal guarantees, many providers have moved away from them. The Slash Card does not require a personal guarantee, reducing the personal risk involved in managing company spending. That’s a meaningful safeguard for startups, founders, and employees who don’t want business expenses tied to their individual finances.

Spend controls

Credit cards issued by institutional banks typically offer more traditional, less flexible expense-management tools. Charge cards, particularly those built by modern financial platforms, can deliver more advanced, software-driven controls. Slash, for example, integrates its charge card directly into its business banking dashboard, enabling real-time transaction monitoring, customizable spending limits, category restrictions, and scalable virtual card issuance. All transaction data flows into Slash’s analytics and can be exported seamlessly into accounting systems like QuickBooks for faster reconciliation.

Should I get a charge card or a credit card?

The best choice comes down to how your business spends money, manages cash flow, and controls risk. A VC-backed startup, a small business, and a large corporation all have different priorities that ultimately determine which type of card is right for them.

Because no single answer fits every business, it’s more useful to evaluate a few concrete scenarios. The examples below highlight when a charge card makes more sense, when a credit card may be the better fit, and how each option aligns with different financial workflows. Use them as a guide to understand which structure supports your specific needs and growth stage:

1. You’re the new owner of your first business, but you don't have an established credit score

Most business credit cards rely heavily on credit scores and payment history during the application process. Without either, you’re generally limited to secured credit cards, which is a low-limit starter product that requires a cash deposit to open the card account. A more effective way to begin building business credit is to use an accessible charge card that reports to credit bureaus such as Dun & Bradstreet. With the Slash Visa Platinum Card, you won’t undergo a credit check, and you can still access up to 2% cashback from day one. You also gain access to Slash’s financial dashboard, which helps you manage spending, transfers, working capital financing, and other core functions as your business grows.5

Our pick: A charge card, such as the Slash Visa Platinum Card

2. You’re a member of the finance team at a large company, and you’re looking for ways to better manage employee spending

Many credit cards issued by legacy banks lack the modern spend management capabilities that would benefit a finance team. A charge card from a more modern provider like Slash gives teams the ability to issue unlimited virtual cards, set team-specific rules, apply custom limits, and add category restrictions all from a centralized dashboard. The platform’s analytics page consolidates card activity to generate real-time insights about cash flow and spending. By comparison, legacy apps from providers like Amex and Chase offer far more limited visibility.

Our pick: A charge card, such as the Slash Visa Platinum Card

3. You’re a small business owner that needs more cash flow flexibility

If you have strong credit and a small team, a traditional credit card may offer the month-to-month repayment flexibility you need. Tools like balance transfers can help you consolidate existing debt onto a card with a promotional 0% APR period, giving you time to pay down balances without accruing interest. Slash still provides accessible credit and valuable rewards, but if your primary goal is to smooth out cash flow over longer periods, a credit card may be the better match.

Our pick: A credit card, such as the Chase Ink Business Unlimited Credit Card or Quicksilver Card from Capital One

4. You’re a startup founder with significant VC backing, and you need to make large up-front purchases

Startup spending tends to be front-loaded: furnishing an office, onboarding new hires, purchasing equipment, issuing employee cards, and more. A charge card with no preset spending limit offers the flexibility needed to make large purchases quickly, especially when supported by strong cash reserves or venture funding. With Slash, spending capacity adjusts based on your company’s financial profile, and configurable limits help you manage employee usage without slowing down growth.

Our pick: A charge card, such as the Slash Visa Platinum Card

5. You want a stronger rewards program than your current business credit card

Some business credit cards rely on points systems that don’t align with your actual spending patterns, and low redemption rates can make rewards feel negligible. While many credit cards offer compelling rewards, two of the most valuable rewards programs available to businesses today are both affiliated with charge cards. Amex’s premium cards deliver strong statement credits and travel perks, such as competitive booking rates with Membership Rewards points and access to their global airport lounge network. Slash takes a more straightforward approach with up to 2% cashback on all card purchases, offering an industry-leading rate without complex multipliers or redemption rules.

Our pick: A charge card, like the Slash Visa Platinum Card or the American Express Business Platinum Card

Slash: A smarter alternative to traditional credit cards

The Slash Visa Platinum Card is designed for businesses that need substantial spending power and real-time control. Instead of rigid credit limits, long approval timelines, or personal guarantees, Slash adapts your spending capacity to your company’s financial profile. This gives you the freedom to scale purchases quickly—while earning up to 2% cashback across all card spend.

But the real value of Slash extends well beyond the card itself. Slash brings your financial operations into one connected platform, making it easier to move money, manage liquidity, and keep your accounting clean. In addition to the charge card, Slash offers a suite of tools that help streamline how businesses operate every day:

• Diverse payment options: Send funds through the rails that best fit your needs: global ACH, domestic wires, international SWIFT transfers to 160+ countries, and real-time domestic networks like RTP and FedNow. This flexibility gives businesses more control over settlement speed and payment cost.
• Native crypto support: Hold, send, and receive stablecoins such as USDC, USDT, and USDSL across eight supported blockchains. You can also convert company funds into stablecoins using built-in on/off ramps. Crypto transfers are not subject to traditional banking timelines and can offer a fast, low-cost method for moving money—especually across borders.4
• Working capital financing: Slash provides a flexible line of credit that can be drawn on whenever you need short-term liquidity. Unlike fixed 30-day card billing cycles from most credit cards, Slash Working Capital lets you choose 30, 60, or 90-day repayment terms.5
• Treasury accounts: Open integrated high-yield savings accounts from BlackRock and Morgan Stanley directly within your dashboard. Earn up to 4.1% annualized yield, helping your idle cash work harder without adding operational overhead.6
• Powerful integrations: Slash connects cleanly with QuickBooks to streamline your month-end close. All card and payment data can be exported for easier reconciliation and more accurate, real-time expense reporting.

Frequently asked questions

Can I use a credit card for large recurring business expenses?

Yes. Many businesses use credit cards for recurring expenses, but your available credit limit and utilization ratio will dictate how effective this is. If you need more insight into your recurring expenses and no preset spending limits, a charge card like Slash may offer a better fit.

How to set up a virtual credit card?

Most issuers allow virtual card creation in their dashboards. In Slash, you can issue unlimited virtual cards by selecting “Add” in the cards dashboard, then you can assign spend rules, limits, or team groupings as needed.

Are Slash corporate cards secure?

Yes. Slash follows strict security and compliance standards, including PCI DSS, KYC, AML, and SOC 2 Type II. Virtual cards also use tokenization to help reduce exposure to fraud and skimming at the point of sale.