Business credit card vs charge card: what actually changes

The short answer

If you always pay your card off in full, the difference between a charge card and a credit card is smaller than it sounds. Both give you a month or so of float between spending and paying, both can earn rewards, and neither charges interest if the bill is cleared on time. The real differences are what happens in a month when you cannot pay in full, how the spending limit works, where the card is accepted, and what it costs to hold.

• Charge card: pay in full every month. No revolving credit as standard. Typically an annual fee and a points scheme. In the UK, the best-known examples are Amex Business Gold and Platinum.
• Credit card: pay in full, a fixed amount or the minimum. Interest on anything left over. A stated credit limit. Fees range from nothing to a few hundred pounds a year.

I use a business credit card, Capital on Tap’s free card, in my agency and have not held a charge card, so the Amex side of this guide is research from Amex’s own pages, checked on 15 September 2026.

The differences in a table

How a charge card works

With a charge card, every statement is due in full. You spend through the month, the statement arrives, and you pay the whole balance by the due date, usually by direct debit from the business account. There is no minimum payment in the credit card sense, because the product is not designed to lend you money beyond the statement cycle.

That design has two consequences. First, the issuer takes less risk that you will run up a long-term debt, which is one reason charge cards have tended to be marketed with flexible spending power rather than a fixed limit. Spending power is set by the issuer and can move with your spending and repayment history; it is not the same as unlimited, and a large or unusual purchase can still be declined. Second, the card earns its money from annual fees and merchant fees rather than interest, which is why charge cards usually carry a fee and lean heavily on points and perks to justify it.

Amex Business Gold is £0 in year one, then £195. Amex Business Platinum is £650. Both are described by Amex as charge cards to be paid in full monthly. How they compare with each other, including whether Platinum’s credits cover its fee, is on our Amex Business Gold vs Platinum page.

Amex’s Flexible Payment Option

Amex has softened the pay-in-full rule. On both business charge cards, its pages describe an optional Flexible Payment Option at 29.1% p.a. variable. It lets you spread part of the balance rather than paying everything at once. Neither page shows a representative APR, because the core product is still a charge card.

Treat the option as a safety valve, not a plan. If your business regularly needs to spread card spend over several months, you are really looking for a credit facility, and it is better to choose one on purpose, with a rate you can compare, than to fall into one. Our guide to the business credit card vs loan vs overdraft decision covers the alternatives.

How a business credit card works

A credit card gives you a revolving credit limit. Each month you can pay the full statement balance, a fixed amount, or at least the minimum. Pay in full and there is usually no interest on purchases. Pay less and interest is charged on what remains, at the card’s purchase rate.

Capital on Tap works this way. You choose to repay the minimum, fixed amount or full balance, and no interest on purchases if you pay the statement balance in full by the due date. The minimum payment is the greater of 10% of the balance or £100. It advertises rates as low as 13.86% APR (variable) and does not publish a representative APR; your rate depends on your personal and business credit history and the Bank of England base rate. It charges £0 charge for missing the minimum payment, though missing payments still has consequences: points can be lost if you are more than 14 days late. Limits go up to £250,000, though starting limits can be modest. The full fee table is on our Capital on Tap fees page.

Used well, a credit card behaves exactly like a charge card: set the repayment to full balance by direct debit and you get the float, the rewards and no interest. The difference is that the option to pay less is always there. For some businesses that flexibility is valuable in a lumpy month; for others it is a temptation. Our guide to avoiding business credit card interest sets out the habits that keep the bill at zero.

UK examples of each

Figures below are from each issuer’s own page, checked on 15 September 2026. The full list is in our comparison of every UK business card.

Charge cards

• American Express Business Gold: £0 in year one, then £195; earns 1 Membership Rewards point per £1 (2 per £1 with Amex Travel); eligibility is ltd or LLP only; director or member; £20,000+ personal income. Sole traders are not eligible.
• American Express Business Platinum: £650; earns 1 point per £1 (2 per £1 with Amex Travel); £600 Amex Travel credit, £300 Indeed and £150 Dell statement credits; eligibility is ltd or LLP only; £35,000+ personal income. Sole traders are not eligible.

Credit cards

• Capital on Tap: £0 annual fee; 1% cashback; 0% non-sterling transaction fee; Ltd, LLP or PLC only; as low as 13.86% APR (variable), no representative APR published.
• Barclaycard Select Cashback: £0 annual fee; 1% cashback, uncapped, but only in months when you spend more than £2,000; 25.5% APR representative (variable); sole traders accepted.
• Santander Business Cashback Credit Card: £30 annual fee; 1% cashback, uncapped, paid monthly; 23.7% APR representative (variable); purchase rate 18.9%; existing Santander business current account; sole trader, partnership, LLP or Ltd with up to two partners or directors. Limits £500 to £25,000.
• British Airways Amex Accelerating Business: £250 annual fee; 104.9% APR representative (variable), including the fee; earns 1.25 Avios per £1 (cut from 1.5 on 7 October 2026); 10,000 bonus Avios per £20,000 spent (up to three times a year). This is an Amex product, but a credit card, not a charge card, and it accepts sole traders.

Notice the BA card’s representative APR. It looks alarming because the calculation folds the annual fee into an assumed credit limit. The purchase rate is lower, and none of it matters if you pay in full. It illustrates why a representative APR is only one input when comparing cards.

Credit checks and your credit file

Both kinds of card are credit products, so both usually involve a credit search when you apply, and both can be reported to credit reference agencies once you have the card. Whether the search is soft or hard, and whether it touches your personal file, the business file or both, varies by issuer; read the application page before you apply.

Capital on Tap is explicit about its approach: a soft search on your personal credit file when you apply, with a hard search on the business file only once you sign the credit agreement. For other issuers we have not recorded the search type, so check with them.

Over time, the card type matters less than how you use it. On-time payments build a track record; missed payments damage it. Our guide to building a business credit score explains what the agencies look at.

Acceptance

This is where the UK choice between charge and credit card becomes a choice between networks. The best-known business charge cards are Amex, and amex acceptance is narrower than Visa in the UK and abroad. Many independent suppliers, tradespeople and overseas merchants take Visa and Mastercard but not Amex.

Most business credit cards are Visa or Mastercard. Capital on Tap is a Visa card. If you hold an Amex charge card for the points, a no-fee Visa alongside it covers the places Amex is refused; the Capital on Tap vs Amex Business comparison explains how that pairing works.

Rewards and fees

Charge cards tend to lead on rewards, because the annual fee pays for them. Amex’s Membership Rewards points can be transferred to airline and hotel partners, which is where most people get the best value; used for statement credits or gift cards they are usually worth less. Platinum adds travel and statement credits that are only worth what you would have spent anyway.

Credit cards range widely. Some pay nothing, some pay cashback with conditions attached (Barclaycard’s is 1% cashback, uncapped, but only in months when you spend more than £2,000), and some pay straightforward cashback on everything: Capital on Tap pays 1% cashback with £0 annual fee.

Watch the foreign transaction fee on either type. Amex UK’s general statement puts it at 2.99% on its cards. Capital on Tap charges 0% non-sterling transaction fee. On a few hundred pounds a month of dollar software subscriptions, that difference can outweigh the rewards.

Personal liability

Business cards for small companies often come with some form of personal liability for the director, whichever type you choose. Capital on Tap states a personal guarantee required from a director or major shareholder. Other issuers set their own terms, and not every product page says; ask before you sign. Our guide to the director’s personal guarantee explains what you are agreeing to and how to limit it.

One practical point: a charge card’s pay-in-full rule means the balance should never build up beyond a month’s spend, which limits how much a guarantee could ever be called on for. A credit card only offers the same protection if you set it to repay in full.

Who suits which

For most small limited companies, a no-fee credit card on a full-balance direct debit gives everything a charge card does except the premium perks, with wider acceptance and without the fee. A charge card earns its place when the points and travel benefits are genuinely used, and it is common to keep a Visa alongside it for everywhere else. If you are also weighing a card against simply paying from the bank account, see business credit card vs debit card.