Best Charge Cards

A charge card is a credit card that requires the balance to be paid in full every month.

Many people use charge cards because they force more disciplined spending than credit cards. Because charge cards require payment in full each month, consumers cannot adopt an "I'll pay for it later" type of approach and continue to amass more and more debt. If they do not pay their balances in full by a specific time (usually within 25 days of the bills arrival) they cannot make any more purchases.

Additionally, many people enjoy the rewards and exclusivity garnered from charge cards. Users often earn points on their purchases and receive other perks like concierge service and discounted tickets to concerts and sporting events.

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.

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.

Charge Card vs. Credit Card:

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.

2023’s Best Charge Cards vs. Best Credit Cards

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.

No, there aren’t any charge cards for bad credit. Most of these cards require at least good credit for approval. So, it’s better to wait until your credit score has improved before submitting an application for a charge card.

Alternative Credit Card Option:

If you have bad credit, it would be best to apply for a secured credit card. Secured cards require security deposits, but they have the highest approval odds of all credit cards and accept people with bad credit. In addition, you will be able to build your credit and you’ll eventually be eligible for a charge card.

A good example is the Capital One Quicksilver Secured. This card offers 5% cash back on hotels and rental cars booked through Capital One Travel, as well as 1.5% cash back on all other purchases. Keep in mind, however, that Capital One Quicksilver Secured requires a security deposit of $200, which will act as your credit limit.

There aren’t any retailers that offer store charge cards. Many people refer to store cards as charge cards. It’s common to hear reference to a Walmart charge card, a Kohl's charge card or a Target charge card as a result. But store cards are credit cards on which you can carry a balance from month to month, not charge cards whose balance must be paid in full each month. A good rule of thumb to remember is that if it has an interest rate, it's not a charge card.

There are benefits to using both charge cards and debit cards. Charge cards allow you to build credit history and do not require immediate payment for purchases, which provides both flexibility and added protection from fraud. You must simply pay your balance in full at the end of each month in order to retain purchasing privileges and avoid late fees.

Additionally, charge card accounts provide far more lucrative perks and rewards than do debit cards. The only benefit that a debit card has over a charge card is that it makes it impossible to spend more than you can afford. Therefore, you should only use a debit card if you seek this type of inherent discipline.

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.

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.

Yes, there is a charge card on the Visa network, the Ink Business Premier. This card is a great option for business owners as it offers $1,000 for spending $10,000 in the first 3 months. Plus you can earn 2 - 5% cash back. The card’s annual fee is $195. 

A charge card is a special type of credit card where you must pay the balance in full each month. But besides the Ink Business Premier card, all the cards on the Visa network 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.