Charge card vs Credit card: Which one is right for your business?

Key takeaways

• Credit cards and charge cards can support both business spending, but offer different advantages and drawbacks.

• Credit cards come with an interest rate and do not require you to pay back the entire amount each repayment period; charge cards do not charge interest and require the whole amount to be repaid each period.

• Airwallex’s multi-currency Corporate Cards offer an alternative to traditional charge cards with instant issuing, market-leading FX, and powerful controls.

Credit cards and charge cards are increasingly popular among both businesses and consumers. According to GlobalData¹, Australians were using credit and charge cards at a frequency of 225.5 times per card in 2024, and this is projected to increase to 239.5 in 2029.

Cards can support business spending and growth, but understanding the difference between credit and charge cards can help you avoid choosing a product that doesn’t suit your credit needs, cash flow, and purchasing power.

This article explains the key differences between charge cards and credit cards, as well as Airwallex’s alternative Corporate Card, so you can make the right choice for your business.

What is a charge card?

A charge card is a type of business payment card that offers no pre-set spending limit and is designed to meet your spending and transaction patterns. Because of this, you are required to repay your balance in full each repayment period. Charge cards do not come with an interest rate and can also come with other benefits, such as rewards points. In Australia, charge cards are primarily offered by American Express.

What is a credit card?

A credit card is a payment card that businesses or consumers can apply for up to a pre-set limit. Unlike charge cards, you are not required to pay the entire credit card balance in full each payment period. However, you will be charged an interest rate for any outstanding balance. Credit cards come with a number of benefits including frequent flyer points, rewards points, free flights, insurance, airport lounge access, and security features. Most major banks, credit unions and financial institutions offer credit cards.

Credit card vs Charge card: 6 key differences

Business credit cards and charge cards differ in a number of ways; including billing and repayment cycles; how interest rates are applied; purchasing power and credit limits; rewards and benefits; eligibility; and availability in Australia.

Billing and repayment

Billing and repayment cycles are one of the main differences between credit cards and charge cards. You can carry a credit card balance between repayment periods up to your credit limit, as long as you continue to make your minimum payments each cycle. With a charge card, you need to pay your balance off in full each repayment period. 

Interest rates

Credit cards come with an interest rate, called a purchase rate. This is the rate of interest you will be charged if you don’t pay your balance off in full each repayment period. Charge cards do not come with an interest rate. 

Credit cards also come with other interest rates, such as balance transfer rates. You are charged the balance transfer rate for withdrawing cash from an ATM.

Purchasing power and credit limits

Credit cards and charge cards operate in a fundamentally different way when it comes to approving transactions. When you apply for a business credit card, you will be given a credit limit that you can spend up to. Once you repay what you’ve spent, you can spend more.

Charge cards do not give you a credit limit. Instead, each purchase is dynamically approved based on your financial profile. There is no clear limit assigned to you, but each transaction will be approved or declined based on how much it’s determined that you can spend from your spending patterns. 

Rewards and benefits

Both credit cards and charge cards can offer various rewards and benefits to business cardholders. Depending on the card you choose, you can expect to find frequent flyer or reward points, airline lounge passes, bonus points, discounts, vouchers, and complementary insurances. However, all business charge cards in Australia come with some form of rewards, while only certain business credit cards come with rewards and vary as to what these are.

Eligibility

Eligibility ‌for a business charge card is usually more strict than ‌with standard business credit cards. For example, you can expect higher business revenue requirements (usually above A$75,000 p.a.).

Availability

Charge cards are not as widely available in Australia as business credit cards. Generally, business charge cards are available from American Express, while you can find business credit cards from most banks and financial institutions. 

Understanding fees and interest: Charge cards vs credit cards

Charge cards and credit cards have different costs, both in terms of fees and interest rates. Fees are the primary cost-driver for charge cards while credit cards have both fees and interest rates to be aware of. Here’s how they both work:

Charge card vs credit card: Which is more suitable for your business?

The choice between a charge card and a credit card depends on your business's cash flow and financial needs. If your business has consistent cash flow and you prefer to avoid interest charges by paying off the balance in full each month, charge cards could be the right choice for you. The high flexibility in spending limits and high-value rewards can be significant advantages for your business.

Alternatively, if your business requires more flexibility in managing cash flow, credit cards offer the ability for you to make minimum payments each month and carry a balance. Their lower annual fees and greater accessibility can also provide additional incentives.

A corporate card alternative that removes barriers to fuel your business growth

The Airwallex Corporate Card provides a modern alternative to charge cards. Currently available as a debit card, with the credit card option available to sign up for wait list, the Airwallex multi-currency Visa is an all-in-one solution to manage team and business expenses. 

Unlike traditional charge cards, Airwallex streamlines global transactions more cost-effectively by eliminating unnecessary fees and offering competitive exchange rates.

Airwallex lets you instantly create virtual multi-currency cards for shared team expenses and set advanced spend and control limits. See every dollar in real-time on your dashboard and enjoy no more surprise fees or costs with market-leading FX and spend from your held multi-currency balances.

Enjoy up to 50 free company cards with our Grow plan. See our full pricing here.

Charge card vs credit card: Frequently asked questions

Can businesses earn rewards with charge cards?

Yes, many charge cards offer rewards points for business spend. These rewards can come in various forms such as points for spending, cash back, travel points, or discounts on business-related expenses.

Are there business charge cards with no annual fees?

American Express is currently the sole provider of charge cards in Australia. Its range of charge cards all come with annual fees.

What is a charge card vs credit card, and how do they differ from debit cards?

A charge card requires you to pay off the full balance each month and typically has no preset limit. A credit card allows you to carry a balance and pay interest on the amount owed. Debit cards deduct funds directly from your bank account, offering no credit line. 

What are the main credit card fees businesses should know about?

Credit card fees include annual fees, foreign transaction fees, and late payment charges. One of the most costly is the interest charge on credit card balances if not paid in full. Businesses should also watch out for credit card transaction charges that apply to overseas purchases or high-volume spending. Knowing the annual fee credit card definition is crucial for calculating long-term costs.

What are the disadvantages of a charge card, and is it the same as a credit card?

Charge cards often come with higher annual fees and must be paid off in full monthly. This can strain cash flow if not well-managed. Unlike credit cards, they don’t allow partial payments, and the limit on a charge card can vary based on your payment history. So while similar, is a charge card the same as a credit card? Not quite – the repayment terms and usage flexibility differ significantly.

Sources:

1. https://www.globaldata.com/media/banking/australias-credit-and-charge-card-payments-to-near-300-billion-in-2025-amid-consumer-and-e-commerce-growth-forecasts-globaldata/

2. https://www.americanexpress.com/au/credit-cards/about-credit-cards/fees/?linknav=au-seo-creditcardsau-faq-fees 

3. https://www.americanexpress.com/au/credit-cards/about-credit-cards/what-is-a-charge-card/

The information in this article is based on our own online research. Airwallex was not able to manually test each tool or provider. The information is provided for educational purposes only and a reader should consider the specific requirements of their business when evaluating providers. This research is reviewed annually. If you would like to request an update, feel free to contact us at [[email protected]]. This information doesn’t take into account your objectives, financial situation, or needs. If you are a customer of Airwallex Pty Ltd (AFSL No. 487221) read the Product Disclosure Statement (PDS) for the Direct Services available here.