Small businesses have a new tool to help them control spending: charge cards from Bank of America.
Unlike credit cards, charge cards must be paid in full each month. The Charlotte, N.C.-based bank is marketing the cards by pitching that feature, saying it gives businesses greater control over expenses, without finance charges.
The bank is offering three levels of charge cards, all of which offer free employee cards that can have preset spending limits. All bear a MasterCard logo.
The first tier doesn't have an annual fee.
The second tier, which earns rewards points, carries a $49 annual fee after the first year, unless the customer also has a business checking account with Bank of America (NYSE: BAC).
The top tier has no preset spending limit, earns enhanced rewards with higher point totals per charge, offers complimentary identity theft protection and other services. Customers that don't have a Bank of America checking account are charged a $125 annual fee after the first year.
The cards were designed in response to small business customers who said they wanted something with more financial discipline built in, said Chip Rossi, the executive who oversees charge and credit cards for the Bank of America.
Providing short-term credit can help businesses manage cash flow, and the ability to set limits for employees provides an element of control, he said.