Charge Cards

When you look at a charge card vs. a credit card, the most important difference is that charge cards don’t allow you to carry a balance between months, 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. For example, charge cards are more likely to have no preset spending limit. That doesn’t mean you have no limit, just that you won’t know your limit.

It’s good to be aware of all the major similarities and differences between charge cards and credit cards so you can make an informed decision about which to get.

Charge Card vs. Credit Card:

                                   
One more major difference between charge cards and other credit cards is the consequence of not paying your monthly bill in full. With a credit card, if you don’t pay in full but make the minimum payment, you’ll just owe interest on the remaining balance. But if you don’t pay a charge card in full-, you’ll get hit with steep late fees and may be unable to make new purchases until you pay your balance.

Some charge cards do have short-term financing. For example, American Express has a feature called “Pay over Time” on some of their charge cards. That lets you carry a balance between months on certain charges of $100 or more. You must also call Amex and have them approve the charge as “pay over time” after you make it. There is no overall time limit to pay your charges back, but you will have a monthly minimum payment. Not all cardholders are eligible.

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.

2018’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.

Many people refer to store cards as charge cards, making talk of a Sears charge card, a Walmart charge card, a Kohl's charge card or a Disney charge card quite common.

However, in most cases, store cards are credit cards, not charge cards, and they do not require that you pay your balance 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.

No. Unfortunately, if you have bad credit, your credit card options are limited and at the present time there are no charge cards for people with bad credit.

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.

A charge card with No Preset Spending Limit is one that does not have a pre-determined credit line. This does not mean that consumers will be able to spend limitlessly with No Preset Spending Limit credit cards and charge cards though.

An issuer uses various factors including your income, credit score, payment history and spending patterns in order to determine how much money you can spend in a given month. This amount may change from month-to-month and you may not be able to find out what it is.