A charge card is a type of electronic payment card that charges no interest but requires the user to pay their balance in full upon receipt of the statement, usually on a monthly basis. Charge cards are offered by a limited number of issuers.
The key: Credit cards let you carry a balance from month to month, while charge cards require you to pay in full each month.
What is a Charge Card? A Charge Card works like a Credit Card, but without offering the option of making part payment. You are required to pay your charge card bill in full by the due date. Charge Cards offer a 'no pre-set' spending limit.
Charge cards are similar to credit cards in that they allow you to pay for purchases up to your credit limit. ... Charge cards require the balance to be paid back in a short period of time, usually within a month. Debit cards are tied to a bank account from which funds are withdrawn for each purchase.
It could help you get a lower interest rate on loans.
Because a charge card can help boost your credit score, it can also help you to qualify for better interest rates on, say, a mortgage, than if you only had a credit card that carried a balance.
The key difference between charge cards and credit cards is that you have to pay off the money you spend on them at the end of the month. You can't run up a bill and pay it back a few months later. If you don't repay in full, you'll be hit with interest and other charges, and your card could be cancelled.
Best Charge Cards of 2021
| Charge Card | Best For | Annual Fee |
|---|---|---|
| The Plum Card® from American Express | Early-Pay Discount | $0 intro 1st yr, $250 after |
| Sunoco Gas Card | Gas Rewards | None |
| Brex Corporate Card for Startups | Business Rewards | $0 |
| Centurion® Card from American Express | VIPs | $5000 |
American Express is a primary issuer of charge cards in the electronic payment industry. They offer five cards including the: Gold Card, Platinum Card, Plum Card, Business Gold Card, and the Business Platinum Card. Each card has its own terms and reward benefits.
Since charge cards don't have a credit limit, they don't factor into your credit utilization rate, which is the percentage of your total credit you're using. ... Like most credit applications, applying for a charge card will appear as a new inquiry on your credit report, which may temporarily lower your score a few points.
Card Approval
Charge cards are usually harder to get than credit cards. ... In addition, charge cards require excellent credit and a high income level. They are aimed at consumers who have the ability to spend large sums of cash. Credit cards, on the other hand, are aimed at consumers who want to buy now and pay later.
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