There are no charge cards on the Visa network. Only American Express offers charge cards in the U.S. right now. Charge cards are a special type of credit card where you must pay the balance in full each month. All the Visa credit cards are regular credit cards that require only a minimum monthly payment.
You can carry the remaining balance to the following month, but in most cases, you’ll pay interest on the unpaid balance. You do have the option of paying a credit card’s entire balance each month to avoid interest charges.
The main difference between a credit card and a charge card is that charge cards don’t allow you to carry a balance from one month to the next, while credit cards do. Both types of cards allow you to buy now and pay later, but charge cards require that payment to be for the full amount you owe at the end of the billing cycle. Traditional credit cards require you to pay just a portion of your balance by the due date each month to keep your account in good standing.… read full answer
It’s important to note that a charge card actually is a type of credit card – just a unique one. Charge cards and other credit cards are different in more ways, too.
Credit Cards vs Charge Cards: Main Differences
Amount Due: Charge cards require you to pay your bill in full each billing cycle, while credit cards only require a minimum payment (a portion of your entire balance) and revolve the rest of your balance to the next billing cycle. Unless the credit card offers an introductory 0% APR though, you’ll have to pay interest on the unpaid portion of the balance.
Credit/Spending Limit: Charge cards generally don’t have preset spending limits, while credit cards will assign a credit limit based on your creditworthiness.
Debt, Interest and Fees: Charge cards will not allow you to accrue debt as you’re required to pay off your balance every month. Not paying your balance in full by the due date will attract considerable late fees though. Credit cards will only attract late fees if the minimum payment is not made by the due date. However, credit cards will accrue interest on any unpaid balance, unless they offer an introductory 0% APR for a certain period of time.
Credit Score Impact: Credit utilization isn’t part of the scoring criteria for charge cards, as they have no preset spending limit. Credit utilization for credit cards, on the other hand, is recommended to be kept no higher than 30-40%.
Annual Fees: Charge cards tend to charge high annual fees, while credit cards make for a more diverse offering, covering the whole spectrum of credit, from bad and limited, to excellent credit.
Some hybrid cards do have some sort of short-term financing. For example, American Express has a feature called "Pay Over Time" on some of their cards. That lets you carry a balance between months on certain eligible charges, with interest, up to a limit. Not all cardholders are eligible and all charges that are not included in the Pay Over Time balance must be paid in full by the due date.
Now that you’re familiar with the fundamental differences between charge cards and credit cards, you can take a look at some of the best that both types have to offer.
Overall, credit cards tend to be better than their charge card counterparts for most people. Credit cards provide financing capabilities, for one thing, and some of them are much easier to obtain. Charge cards can be very attractive to a certain segment of the market, though – people with good or better credit who always pay in full and want premium rewards.
The two most important factors to consider when selecting a charge card are the rewards and the annual fee.
In addition to earning points on your spending, some charge cards offer relatively extensive additional benefits such as a 24/7 concierge service, discounted tickets to concerts and sporting events, and airline and hotel perks. However, the more rewards a card provides, the higher its annual fee will likely be.… read full answer
So before applying for any charge card consider whether you will truly make use of its additional benefits. If you expect to only take advantage of the points earned on purchases, concentrate on finding the charge card with the lowest annual fee.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. This question was posted by WalletHub.
Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.