Key takeaways
- Charge cards: paid in full each cycle, limits based on your finances.
- Prepaid cards: spend only what you load, easy to get.
- Credit cards: carry a balance, often need a personal guarantee.
- Several fintech cards don’t require a personal guarantee.
The three card types
| Type | How you pay | Typical fit |
|---|---|---|
| Charge | In full each statement | Established companies with steady cash |
| Prepaid | From money already loaded | New companies, tight budget control |
| Credit | Carry a balance up to a limit | Businesses that want short-term credit |
How they affect cash flow
Charge cards give you until the statement date to pay, which works like a short interest-free float, but the full balance is due each cycle. Prepaid cards never create a bill, because you’ve already funded them. Credit cards let you spread costs over time, with interest on any balance you carry.
Personal guarantees
Many bank-issued business cards ask founders to personally guarantee the balance. Several fintech cards, including Venn and Ramp in Canada, state that no personal guarantee is required.
Examples in Canada
- Venn: prepaid-style card with 1% cashback on all spend.
- Ramp: charge card with 1% cashback, for companies with at least CA$25,000 in the bank.
- Loop: credit card with no FX fee on CAD, USD, GBP and EUR spend.
- Amex Business Gold Rewards: charge card with points and a C$199 annual fee.
Providers that can help
1% cashback, no personal guarantee
Charge card, no personal guarantee
Credit card, no FX fee on four currencies
FAQs
What is the difference between a charge card and a credit card?
A charge card must be paid in full each statement and doesn’t let you carry a balance. A credit card has a limit and lets you carry a balance, with interest on what you don’t repay.
Do corporate cards affect my personal credit?
They can if you sign a personal guarantee, because you become responsible for the balance. Cards with no personal guarantee keep company spending separate from your personal credit.
Which corporate cards in Canada don’t need a personal guarantee?
Venn and Ramp both state that no personal guarantee is required for their Canadian cards. Check each card’s terms before you apply.
Is a prepaid corporate card a good idea for a new business?
It can be. Prepaid cards are usually easier to get, don’t create a bill, and make it simple to control spending, though they don’t give you credit.
Sources: Published card terms from Venn, Ramp, Loop and American Express.