Charge Cards vs. Credit Cards: Know the Key Differences & Benefits!
A charge card is a type of payment card with no spending limit but requires the cardholder to pay off the balance in full each month. Also, charge cards do not charge interest, unlike credit cards. However, charge cards impose a fee, which might be a percentage of the unpaid balance if you don't pay off the card each month. Charge cards offer generous rewards and points but typically charge a high annual fee.
Credit cards vs Charge cards:
Credit cards are basically products that allow customers to borrow money against a 'line of credit' and repay the same every month, along with a nominal rate of interest. Credit cards are a boon to individuals as they can purchase all their favorite high-end products and services while paying for the same in installments. However, individuals will have to note that there is a limit imposed on the amount that they can spend. Charge card on the other hand, is slightly different. Customers using Charge cards can also buy products but a line of credit will not be extended to them. They cannot repay the amount in installments but will have to pay back the entire amount that they've spent in one go. In case this is not done, a penalty amount will be levied. Unlike Credit cards, Charge cards do not have applicable interest rates and do not impose limitations on customers regarding their spend limit. Charge card customers are usually privy to a number of offers and perks.
The concept of Charge cards is supposed to have been founded by the card company that issues Diners Cards called Diners Club International. Other providers include Amex, MasterCard and Visa. Charge cards in India are not as commonly used as Credit cards are and this is mainly because most individuals are not aware of this concept. Both of these cards allow customers to delay their payments. Individuals will have to repay the amount within a set period of time else a predetermined penalty will be levied.
However, despite some of their similarities, these cards are not the same.
