Business

What is a Charge Card? Definition and Overview for UK Businesses

Paola Faben Oliveira

13.02.23 (updated more than 1 year ago)

Read time 2 minutes

Looking for the best way to manage business expenses? There are a few different options out there, from business credit cards to charge cards. Ideally, you’ll be looking for something convenient and low cost.

In this guide, we’ll focus on charge cards. We’ll run through how they work, and the key pros and cons to consider. This should help you decide whether this is the right option for your needs.

So, let’s get started.

What is a charge card?

A business charge card offers interest-free spending, but you must pay the balance off in full at the end of each statement period.

They don’t usually have a spending limit, and some even come with additional perks such as travel insurance or discounts.

💡 Read more: Charge cards for business: overview of UK providers

How does a charge card work?

A business charge card works in a similar way to a credit card. You issue cards to employees who need them, and they can use their card to pay for business expenses. For example, office supplies, equipment and business travel.

At the end of each billing cycle - usually between 25 and 51 days¹ - the business needs to make sure it pays off the balance for each charge card in full. Otherwise, hefty fees may be charged.

Charge card advantages ✅

Here are just a few of the benefits of business charge cards¹:

No interest on spending

No risk of getting into debt - as the balance must be paid off in full each month

Additional rewards, discounts and benefits

High or no spending limits.

Disadvantages of charge cards ⛔️

Now, let’s run through some of the potential drawbacks¹:

High annual fees

High fees for late payment - these can sometimes be higher than the interest charged on business credit cards

No Section 75 purchase protection

Not all charge cards are accepted everywhere

Late payment could negatively affect your company’s credit score.

Charge card vs. credit card

Deciding whether to use a charge card or credit card for your business? Here are some of the key differences between the two:

Business charge cards	Business credit cards
Balance must be paid off in full	Flexible and ongoing line of credit
No interest to pay	Interest to pay
High or no spending limits	Spending limits based on credit score
No purchase protection	Section 75 purchase protection

what-is-a-charge-card

Alternative to business charge cards - Wise Employee Expense Cards

There is another option available for conveniently managing employee expenses. Open a Wise Business account online and you can get Wise Employee Expense cards for everyone who needs one.

Each additional card costs just £3, but offers 0,5% cashback on eligible spending as a reward.

There are no monthly fees to pay, or transaction fees for foreign currencies. You and your team can spend worldwide at the mid-market exchange rate, making them ideal for international business travel.

You can even pre-set daily and monthly spending limits, and track transactions all in one place.

Learn more about Wise Business

Read more about corporate cards 💡

If you want to explore more topics and options related to corporate cards, have a look into some useful articles:
Best credit card for business expenses in the UK Charge cards for business: overview of UK providers 4 best cashback business credit cards in the UK - and one debit card alternative 5 best credit cards for business travel in the UK - plus one debit card alternative Prepaid business cards UK: overview of providers Corporate credit card for UK businesses: a practical guide Allstar expense card UK: features and alternative Tide expense cards UK: cost and features What is a corporate debit card and how UK businesses can benefit from it

If you want to explore more topics and options related to corporate cards, have a look into some useful articles:

After reading this, you should have a better idea about how charge cards work, and whether they could be a good option for your business.

Just make sure to check out all the alternatives first, including Wise Employee Expense cards. With a little research, you can find the perfect fit for your company.

Sources used:

Finder - Business charge cards

Sources last checked on date: 09-Feb-2023

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.