Charge Card vs Credit Card

greenlightluke

Hi MSE's,

Can anyone tell me the pro's/con's over applying for a charge card over the standard credit card?

Will one increase credit worthiness over the other?

Help is appreciated.

grumbler

Don't know any pros, but IIRC the con is that, unlike for CCs, there is no any interest-free period on purchases

[Deleted User]

In a nutshell, for chargecards:

Pros:

No credit limit
Generally better rewards (nowadays it's only really Amex that offers charge cards for mainstream)

Cons:

No credit limit!
No section 75 protection I believe.
Must pay off in full each month.

reclusive46

grumbler wrote: »

Don't know any pros, but IIRC the con is that, unlike for CCs, there is no any interest-free period on purchases

Yes there is. There is no interest at all on a charge card as long as you pay the balance in full.

Paully232000

Some charge cards, well the amex one i have, allow a combination of both.
Never used the facility but I remember being sent something in the post saying that purchases over £200 can be spread like a CC paying a minimum payment, and the rest is paid for at the end of each month, or you can just pay the whole bill when it comes
There is an interest free period from the moment you pay for the item until the bill comes at the end of the month.

greenlightluke

Paully232000 wrote: »

Some charge cards, well the amex one i have, allow a combination of both.
Never used the facility but I remember being sent something in the post saying that purchases over £200 can be spread like a CC paying a minimum payment, and the rest is paid for at the end of each month, or you can just pay the whole bill when it comes
There is an interest free period from the moment you pay for the item until the bill comes at the end of the month.

Can I ask which card that is?

Thank you all for the replies so far.

Paully232000

the one i have is amex platinum charge card

InsideInsurance

greenlightluke wrote: »

Can I ask which card that is?

Thank you all for the replies so far.

With Amex charge cards you can effectively apply for a short term loan against the balance to spread the costs but with an average APR of c20% it is not particularly attractive, especially given you have to be well in the Prime market to get a charge card in the first place.


For a purist charge card -v- credit card there is no advantage at all of a charge card. In practice however charge cards tend to be aimed at more affluent customers and the card companies therefore offer their own additional benefits such as Membership Reward points, special deals with hotels/ airlines etc.

There is again in a purist sense a disadvantage of charge cards in that they are not regulated by the Consumer Credit Act and so there is no section 75 protection. That said, again, in reality most of those that issue charge cards have built in similar terms and conditions as S75 so you simply have contractual protection rather than statutory.

Some of cause like the fact that the card HAS to be paid in full each month but of cause you can do the same with a credit card but you have no true option to carry forward a balance with a charge card (the Amex thing is a loan not a carried forward balance)

greenlightluke

Thanks for all the replies

Another question:

It says to be eligible you must earn at least £20,000 in household income. Might sound like a silly question, but is that my own personal income or everyone in the houses income?

[Deleted User]

Household income is exactly what it should like, everyone in the household (obviously it doesn't count if you're sharing a flat with a load of friends!)