There are plenty of no annual fee credit cards, but charge cards that are currently available carry a yearly cost of ownership (usually substantial the fees on the American Express charge cards range from $150 to $550, for example). A charge card requires good-to-excellent credit. Credit Score RequiredĪ credit card can be obtained even with a bad credit score. A charge card requires payment in full at the end of each month. PaymentsĪ credit card requires a minimum payment at the end of each billing cycle, and you can revolve your balance from month to month. There are six key differences between charge cards and credit cards that you should be aware of. What Are the Key Differences Between a Charge Card and a Credit Card? If you’re eligible for a small business card, there are additional options, such as the Capital One Spark Cash Plus *. These products have features similar to charge cards, but they also have a feature called “Pay Over Time” available to some cardholders that allows eligible purchases to be treated as they would be on a credit card (up to the Pay Over Time Limit), meaning they don’t have to be fully paid off at the end of the billing cycle and are subject to interest charges *.Īside from American Express, a few retailers (notably gasoline chains) may offer charge cards that can only be used within their brand, although the majority of these allow you to carry a balance. The Platinum Card® from American Express (Terms apply).The American Express® Gold Card (Terms apply).The options currently available to consumers include: If you have poor or limited credit history, you may want to look to a secured card instead.Īmerican Express is the only major issuer that still offers cards that resemble a traditional charge card. That’s because the issuer is taking a bigger risk by assuming you’ll pay your full bill every month and not giving you a preset spending limit. How Can I Get a Charge Card?Īlthough credit cards are available even to those with not-so-great credit, a charge card typically requires a good-to-excellent score. It’s almost impossible to find this sort of leniency with a charge card. ![]() ![]() These offers generally last from six months to nearly two years. It’s possible to avoid interest charges for a period of time by using a card with an introductory 0% APR offer on purchases. While the idea of smaller payments may be appealing, interest will accrue over time, adding to your overall burden, so it’s still in your best interest to pay your card off in full each month.īut for someone who needs extra time to pay down their bill, a credit card could be the better choice. It may have a firm borrowing limit, but you’re only required to make a minimum monthly payment on the total amount you owe. Ultimately, a charge card can help you be a more responsible shopper, since you’ll know you’re on the hook to pay back your debt in the not-so-distant future.Ī credit card allows you much more leeway. If you’re planning on making a significant purchase, first contact the issuer to see if they’ll approve the amount you’d like to charge. This doesn’t mean you have unlimited spending ability, though. Unlike a credit card, a charge card doesn’t come with a preset spending limit. This can make it more flexible, since it will grant access to the buying power you need even if that amount fluctuates widely month to month. Read More: Best Credit Cards of 2023 How Does a Charge Card Work? ![]() Here’s a deeper dive into how each type of card works it will help you decide which one is a better fit for your particular needs. There are also other distinctions to be aware of. With a charge card, any balance must be paid in full when the monthly statement arrives. With a credit card, you can carry-or revolve-a balance and pay it off over time, although typically you’ll incur interest charges to do so. Although both allow you to make a purchase without using cash, there’s a big difference when the bill comes. They may look identical, but charge cards and credit cards are surprisingly different financial tools. Please see our best American Express Cards for current offers. The credit card perks or benefits in this post have changed or expired.
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