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Charge Cards |
A Charge Card work like a free one-month loan from bank or other issuer, like financial institution.
Free mean that charge cards don’t apply any interest to your balances.
There are not any minimum payment or partial re-payment. This is very important to understand.
After one-month of charge card use, you must re-pay (clear) the balance in full.
Free mean that charge cards don’t apply any interest to your balances.
There are not any minimum payment or partial re-payment. This is very important to understand.
After one-month of charge card use, you must re-pay (clear) the balance in full.
What is a Charge Card?
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Like in a classic credit card, the issuer of the charge card, grants a line of credit to the holder of charge card. User of charge card is able to temporarily borrow the money (short-term, up to one month) to use them as a payment for goods and services, where card payments are accepted.
On the right picture: American Express Green Charge Card, which offer some great benefits (as for 2013). American Express is the only major issuer which currently offers charge cards. |
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In shortly, holder of the charge card is allowed to buy goods and services (in a similar way to a credit card) and re-pay the balance of the borrowed money in full, at the end of one-month period.
For sure, charge cards give you instant access to credit when you need it immediately. However, you have to pay your balance in full every month.
For sure, charge cards give you instant access to credit when you need it immediately. However, you have to pay your balance in full every month.
Classic credit cards allow you to carry a balance over from one month to the next, and so on. That means, there is risk of build up a substantial debt when you pay only minimum amount required to re-pay every month.
Charge cards do not offer such flexibility and there are hefty penalties when you do not pay your balance in full, at the end of the one-month period.
Charge cards do not offer such flexibility and there are hefty penalties when you do not pay your balance in full, at the end of the one-month period.
What's the basic difference between charge card vs credit card
- Charge Card - There are not interest charges apply. You have to pay your balance in full, every month.
Credit Card - If you are not going to pay your balance in full, issuer of card will add interest charges. - Charge Card – You cannot spread the payment of your balance, into the longer period of time. You have to pay your balance in full each month.
Credit Card – You only need to do the minimum payment required by creditor each month. The rest of your balance could be paid later on, in the coming months or years, if you choose so. - Charge Card - As for my knowledge, you have to pay annual fee for privilege of using such type of card.
Credit Card - The majority of credit cards have annual fees. However, you can find plenty of credit cards offers on the market that offer no annual fee.
Charge cards are not so popular now and there are not many offers of charge cards on the market.
Credit cards are much more popular, flexible, and offer more perks like rewards, cash advances, 0%APR balance transfer, no annual fee, loyalty rewards, to name a few.
Credit cards are much more popular, flexible, and offer more perks like rewards, cash advances, 0%APR balance transfer, no annual fee, loyalty rewards, to name a few.
Author: Mr. Dariusz Kudłaty is owner and developer of this Best Financial Directory. He loves to write financial-related and credit card-related articles, news and stories. He try to publish quality content, presented for you on this website. Enjoy!