Consumer Payment Card News

Credit Card or Charge Card

Credit card? Charge card? Interchangeable? Although both describe a line of finance to fund purchases, they serve respective cardholders differently in many ways. For example, while a credit card allows you to make purchases on credit and to ‘revolve’ your credit balance, a charge card requires you to pay off the full balance every month, as is the case with American Express. Credit cards allow users to finance on credit and repay the balance with interest monthly. On the other hand, you will have to pay charge cards off within a month, but you pay no interest-because the balance is settled each month- and are rewarded with discounts and benefits you just don’t get with a credit card. This is great for those trying to build credit, but this demographic may be tempted given charge cards do not have preset spending limits. Spending without limits may be the reason you’re rebuilding your credit in the first place! So whichever you choose, choose responsibly.

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