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How to Choose Between a Credit Card and a Charge Card

Platinum charge cardPeople sometimes use the terms “credit card” and “charge card” interchangeably. However, they are different animals, and their differences should be clearly understood by any business owner searching for new credit.

Let’s look at some key needs/features that a small business owner might desire when seeking credit, and see whether credit cards or charge cards are best able to meet those needs. There is almost always a trade-off, so think hard about your business requirements to determine which is right for you. (Note: Because American Express is by far the main issuer of charge cards, my commentary on those cards is based mainly on their practices.)

As you can see, both credit cards and charge cards have features to recommend them. However, as with everything in life, the perks come with a price – only you can properly assess the importance of each card feature to the success of your business. But if you now have a better understanding of the differences between the two, you’re one step closer to deciding.

Editor’s note:  this article was originally published at the OPEN Forum.

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About the Author: Adam Jusko is founder of credit card comparison site Index Credit Cards [1], which is regularly referenced in publications including the Wall Street Journal, USA Today, BusinessWeek, Money Magazine, Newsweek, U.S. News & World Report, the Chicago Tribune, and more. Of particular interest to Small Business Trends readers is the section of Index Credit Cards devoted to business credit cards [2].