Charge Card vs Credit Card - What's the difference between a charge card and a regular credit card?
Years ago, credit cards were all charge cards. Nowadays, most people think that the two are synonymous, however there is one very big difference. Charge cards are designed to be paid off in full every month.
I'm sure you've heard the commercials that proclaim that you have "no credit limits to worry about". This is because you are expected to pay what you spend on the charge card at the end of every month. There's no need for credit limits if you are spending within your means.
For this reason, charge cards are typically a little harder to qualify for than regular credit cards. Another difference is, since charge card issuers do not receive revenue from interest, you can expect a larger annual fee than you will usually find on regular credit cards.
However, charge cards have some of, if not THE, the best reward programs that you can find. Especially for traveling, air fare and hotel accommodations. Also, these are the preferred cards for most companies that issue credit cards to their employees. Corporate charge cards offer easy accounting for managing employee expense accounts and amazing rewards to the employee or employer. |
