By John Pierre Saliba · April 2026 · OverdraftMe
Every time you pay a supplier with Amex, you're losing 2%. Visa and Mastercard cost 1-1.5%. Over a year, a business spending $50K/month on credit cards is handing over $6,000-$12,000 in surcharges alone - before a cent of interest.
A business overdraft has zero transaction surcharges. You pay suppliers via bank transfer. The only cost is interest on what you draw, and it's tax deductible.
| Monthly card spend | Amex surcharge (2%) | Visa/MC surcharge (1.5%) | Annual cost |
|---|---|---|---|
| $10,000 | $200/month | $150/month | $1,800 - $2,400 |
| $20,000 | $400/month | $300/month | $3,600 - $4,800 |
| $30,000 | $600/month | $450/month | $5,400 - $7,200 |
| $50,000 | $1,000/month | $750/month | $9,000 - $12,000 |
| $100,000 | $2,000/month | $1,500/month | $18,000 - $24,000 |
Find your row. That's what you're paying for the privilege of using a credit card to manage cash flow.
$50K/month on Amex = $12,000/year in surcharges. A $50K business overdraft at 18% interest with 50% average utilisation costs ~$4,500/year in interest - and it's tax deductible. After the 25% deduction: $3,375. That's a saving of $8,625.
| Credit Card (Amex) | Business Overdraft | |
|---|---|---|
| Surcharge per transaction | 2% on every purchase | $0 |
| Annual surcharge cost ($50K/month spend) | $12,000 | $0 |
| Interest rate | 20-22% p.a. | 14-18% p.a. |
| Interest on $25K avg balance | ~$5,250 | ~$4,500 |
| Annual line fee | $0 - $450 | $500 - $1,000 |
| Total annual cost | $17,250+ | $5,500 |
| Tax deductible? | Surcharges yes, interest only if business card | 100% - interest and fees |
| After-tax cost (25% rate) | ~$14,000+ | ~$4,125 |
| Rewards points value | ~$1,500 (generous estimate) | N/A |
| Net cost after rewards | ~$12,500 | ~$4,125 |
You save ~$8,375 per year.
Let's kill this myth. Most business Amex cards earn 1-2 points per dollar. At best, those points are worth 0.5-1 cent each. On $50K/month spend, that's roughly $3,000-$6,000 in points value per year.
You're paying $12,000 in surcharges to earn $3,000-$6,000 in points. You're losing money on every transaction. The maths doesn't work.
Even on a no-surcharge card (Visa/MC at 1-1.5%), the points value rarely exceeds the surcharge cost - and you're still paying 20%+ interest on any carried balance.
Credit cards work for small daily purchases where a bank transfer isn't practical - fuel, office supplies, travel, subscriptions. The surcharge on a $50 purchase isn't worth worrying about.
But when you're paying $5K, $10K, or $20K supplier invoices on a credit card to manage cash flow? That's the overdraft's job. The credit card is the wrong tool for that amount.
The sweet spot: use a credit card for small daily purchases (under $500). Use a business overdraft for everything else - supplier payments, payroll gaps, tax bills, stock purchases. You get the convenience of the card without bleeding surcharges on large payments.
If your business is spending $20K+ per month on credit cards, you're paying a hidden tax on every transaction. A business overdraft eliminates that cost entirely, charges lower interest, and gives you a tax deduction on everything you pay.
The switch takes 24 hours. The savings start immediately.
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