Charge card vs credit card: Key differences and which one to choose in 2026

Key takeaways

• Charge cards give businesses flexible spending power with no preset limit but require the full balance to be repaid every billing cycle, with high late fees if you miss a payment.

• Credit cards let you revolve a balance and make minimum repayments, but they charge interest on outstanding amounts and can impact your credit profile through credit utilisation and long‑term debt.

• Corporate debit solutions like Airwallex Corporate Cards offer a cost‑efficient option, combining multi-currency spend, real‑time controls, and rewards without interest charges or revolving debt.

If you manage company spend or cash flow, it’s important to understand the difference between charge cards vs credit cards. By 2029, the global charge card market is forecast to reach around US$2.4 billion¹, while recent research shows that nearly a third of businesses use business credit cards as a funding source². These products are now central to how companies pay suppliers, fund growth, and manage day‑to‑day expenses.

This article breaks down how charge cards and credit cards differ in practice. It also shows where newer, debit-based options such as Airwallex Corporate Cards help you control multi-currency spend, reduce fees, and simplify expense management without taking on additional credit lines.

What is a charge card?

A charge card is a type of payment card that requires the cardholder to pay off the entire balance each billing cycle, typically monthly. Unlike credit cards, charge cards do not have a preset spending limit. However, this does not mean unlimited spending, as charges must still be approved based on various factors such as the business's payment history and financial resources. 

Examples of charge cards include the American Express Corporate Card, Corporate Gold Card³, and Platinum Card. These cards typically come with higher annual fees and often include attractive benefits like cashback and rewards programs. However, failure to pay the balance in full by the due date can result in substantial late fees and penalties, making thorough cash flow management and timely payments essential for businesses that use charge cards. 

Read our blog post on charge cards to learn more about how they work and their advantages and disadvantages.

What is a credit card?

A credit card is a payment card that allows businesses to borrow funds up to a pre-approved credit limit to make purchases. Unlike charge cards, credit cards do not require the full balance to be paid off each billing cycle; instead, you can carry a balance from month to month by making a minimum monthly payment. This flexibility comes at the cost of having to pay interest on any outstanding balances.

To understand how this works at a business level, explore our guide to corporate credit cards.

Key differences between charge cards vs credit cards

Charge cards and credit cards both let your business spend on a line of credit, but they work very differently once the statement arrives. The table below summarises the main differences at a glance, followed by a breakdown of how each card type handles payments, interest, limits and your credit profile in more detail. 

Payments and repayment terms

Charge cards require you to pay off the entire statement balance each billing cycle, with no option to make a minimum payment and roll the rest forward.

Credit cards, on the other hand, let you make at least a minimum payment and carry a balance month to month, which can ease short‑term cash flow but increases the risk of building up debt over time.

Interest and fees

Because you’re expected to clear your balance in full, charge cards typically don’t charge interest. However, they come with higher annual fees and steep late payment fees if you miss the due date.

Credit cards typically charge interest on any unpaid balance after the due date and may also apply annual fees, late fees and foreign transaction fees. These can add up quickly if balances aren’t managed carefully.

Credit limits and spending power

With a charge card, there’s usually no preset spending limit printed on the card. The issuer decides whether to approve each transaction based on your recent spending habits, how quickly you pay, and the health of your business, so established companies can often access more spending room than with a set line of credit.

With a credit card, the issuer sets a clear credit limit (for example, $30,000). Your business can’t spend beyond that amount unless you ask for – and receive – a higher limit as your needs grow.

Credit utilisation and impact on credit scores

Because a charge card isn’t a revolving credit account, it typically doesn’t factor into your credit utilisation ratio. That said, your payment history – especially late or missed payments – can still affect your credit scores.

With a credit card, your utilisation ratio (the percentage of your limit you’re using) is a key input into many credit scoring models, so consistently high balances can hurt your score even if you pay on time.

Pros and cons of charge cards and credit cards

Charge cards and credit cards remain widely used in business finance. The global charge card market alone is forecast to reach around US$2.04 billion by 2026⁴, and business credit card usage continues to grow as companies look for flexible ways to manage spend and cash flow.

To decide which type of credit line makes sense for your business, it’s important to weigh their pros and cons:

Debit-based solutions such as Airwallex Corporate Cards give businesses many of the same benefits – multi-currency spend, rewards and real‑time controls – while drawing directly from your business account. That means no credit line or revolving balance to manage, and no interest or late-payment fees to worry about.

Should I get a charge card or credit card for my business?

Whether you should get a charge card or a credit card for your business comes down to how you manage cash flow and what you need from your card. Keep these factors in mind as you compare your options:

• Payment flexibility vs. discipline: Charge cards must be cleared in full each cycle, while credit cards let you carry a balance. Consider whether your business can pay in full each month, or if you’d prefer to spread out your payments for better cash flow. 

• Spending limits: Charge cards often come with no preset limit, whereas credit cards use fixed limits. Think about whether you truly need that extra headroom, or if it doesn’t make much of a difference. 

• Total cost: Different cards charge you differently – some hit you mainly on annual fees, others on FX markups, interest on carried balances or late fees. Instead of comparing cards only based on annual fees, factor in other costs you’re likely to incur as well.

• Rewards: Both charge and credit cards can offer rich rewards, especially for travel. What really matters is whether those perks match your actual spend – for example, frequent flights and hotels vs. software, ads and supplier payments – so you’re not paying for benefits you rarely use.

The choice between a charge card and a credit card ultimately depends on your business's specific 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. 

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.

For businesses that don’t require the credit line function of charge and credit cards, Airwallex offers multi-currency debit cards that are free to create for employees and companies with no annual fee. These virtual Visa cards can be used for online payments, such as SaaS subscriptions, and offline transactions, including travel and entertainment expenses, by adding them to digital wallets like Apple Pay or Google Pay. 

Airwallex Corporate Cards: The better alternative to managing business expenses

Airwallex Corporate Cards are a modern alternative to traditional corporate charge and credit cards, built to manage global expenses efficiently. With Airwallex Corporate Cards, you spend directly from your multi-currency wallet, pay in local currencies without unnecessary conversion costs, and benefit from competitive exchange rates for international transactions.

PURE Group uses Airwallex Corporate Cards across Hong Kong, Singapore, Beijing, Shanghai and New York to issue cards to staff in a few clicks, cut out out‑of‑pocket spend and reimbursements, and set card-level limits for ad spend and subscriptions. They now enjoy free, instantly issued cards with zero transaction fees on international payments and 1% unlimited cashback across 140+ currencies. 

Corporate cards are just one part of the broader Airwallex Spend suite. With in-built Expense Management, you get real-time visibility over spend, digital receipt capture, policy-based approvals, and configurable limits by team, card, or employee, plus direct integrations with accounting tools like Xero and QuickBooks.

Airwallex also streamlines how you pay vendors and suppliers. Using Bill Pay and local/overseas bank transfers from the same platform you use to issue cards, you can hold and pay in multiple currencies and send cost-effective cross-border payments, as outlined in our guide to paying overseas suppliers.

Ultimately, Airwallex is more than a corporate card provider. The Airwallex Business Account combines Global Accounts for receiving funds in multiple currencies, FX & Transfers, multi-currency corporate cards, in-built Expense Management, Bill Pay, and accounting integrations into a single platform to manage spend and support global growth.

Frequently asked questions (FAQs)

How does a charge card work?

A charge card lets you make purchases on a line of credit with no preset spending limit, but you must pay the full balance by the end of each billing cycle, or you’ll incur late fees. Because there’s no option to revolve a balance, charge cards can offer flexible spending power while encouraging disciplined, short-term repayment; for a deeper dive into how they work for businesses, see the Airwallex guide to charge cards. 

Who should use a charge card?

A charge card is best suited to businesses with stable, predictable cash flow and disciplined spend management that can confidently pay off their full balance every month. These businesses often make larger purchases, value flexible (often higher) spending power and rewards, and prefer to avoid interest charges; if your cash flow is uneven or you need to spread repayments, a traditional credit card or a multi-currency debit solution like the Airwallex Corporate Card may be a better fit.

How do I apply for a charge card?

You typically apply for a charge card directly with an issuer, and approval usually requires a good to excellent credit score, since the provider is extending flexible spending power and expects you to pay in full each month. Today, most true charge-card-style products are issued by a few providers like American Express, and some may be available only to certain customer segments (e.g. business or premium personal cards).

Does a charge card build credit faster?

No – a charge card doesn’t inherently build credit faster than a credit card. Like credit cards, it can help you build credit if you consistently pay your full balance on time, but the pace of improvement depends on your overall credit behaviour (on‑time payments, low debt, and responsible use across all your accounts), not the card type itself.

Who should use a credit card?

A credit card is best suited for businesses that need more flexibility in managing cash flow, since it allows you to make minimum payments and carry a balance over time (with interest) instead of paying the full amount each billing cycle. It’s a good fit for companies still building their credit profile or those who want rewards and broad acceptance for day‑to‑day spending, as long as they manage balances carefully to avoid high interest costs and fees.

Sources:

1. https://www.thebusinessresearchcompany.com/report/charge-card-global-market-report

2. https://www.forbes.com/advisor/credit-cards/business-credit-card-statistics/

3. https://www.americanexpress.com/en-sg/business/corporate-card-programmes/compare-corporate-cards/

4. https://www.globenewswire.com/en/news-release/2022/06/10/2460340/28124/en/Global-Charge-Card-Market-Trends-and-Growth-Forecasts-Compound-Annual-Growth-of-1-with-Market-Set-to-Reach-2-04-Billion-in-2026.html

This publication does not constitute legal, tax, or professional advice from Airwallex nor substitute seeking such advice, and makes no express or implied representations / warranties / guarantees regarding content accuracy, completeness, or currency. If you would like to request an update, feel free to contact us at [[email protected]]. Airwallex (Singapore) Pte. Ltd. (201626561Z) is licensed as a Major Payment Institution and regulated by the Monetary Authority of Singapore.