A charge card is a payment card that lets a business spend during a billing period and then requires the balance to be paid in full at the end of that period, rather than letting the balance be carried over from month to month.
General information, not financial, legal, or tax advice. Verify current terms and eligibility with the provider before applying.
How a charge card works
A charge card is used like a credit card to pay for goods and services, but the full balance is due at the end of each billing period. Because there is no option to carry a balance from one period to the next, a charge card generally does not charge interest on purchases. Instead of a fixed credit limit, many charge cards have no preset spending limit, and individual purchases are approved based on factors such as payment history and spending patterns. Missing the full payment can lead to fees and loss of card privileges, current as of 7 September 2025.
Charge card and credit card
The main difference between a charge card and a credit card is repayment. A credit card is a form of revolving credit with a set credit limit that lets the holder carry a balance and pay interest on it over time. A charge card requires the balance to be paid in full each period and usually does not let the holder carry a balance, so interest on purchases is generally not charged. Credit cards have a defined credit limit, while many charge cards have no preset spending limit and instead assess each transaction.
Why it matters to a business
Charge cards are often aimed at businesses and frequent spenders because the absence of a preset spending limit can suit firms with large or variable monthly outgoings. Paying in full each period imposes discipline and avoids interest, but it also means the business must have the cash to clear the balance on time. Annual fees, rewards, eligibility, and the exact terms of how the spending limit is assessed change and vary by provider, so confirm current details before applying.
Frequently asked questions
What is a charge card?
How is a charge card different from a credit card?
Do charge cards have a spending limit?
Do you pay interest on a charge card?
Definitions, fees, features, and eligibility change and vary by region. This page was last reviewed on 7 September 2025. Confirm current terms with the provider before applying.