Credit Card/Charge Card

november

What is the difference? I ask because I was filling in a on-line poll which asked how many credit cards I had but said exclude charge cards like American Express.

I was thinking of getting an American Express (I'm just waiting for my statements from 2 other cards I'm closing first) for spending due to Martin's recommendation. Martin doesn't call AE's charge cards though but lists them under credit cards.

(p.s. This is my first ever thread on here so if its a daft question go easy )

mountainofdebt

As I understand it a credit card will allow you to make purchases on it and then, at the end of the month, you can opt to pay only a %age back and then the rest will attract interest.

A charge card will also allow you to make purchases but you have to pay the whole amount owing on it at the end of the month

Clariman

Hi november - it is not a daft question. I think that Martin describes the difference somewhere on the site but I'm not sure where. There was also a thread about it fairly recently. Anyway, here is a quick thumbnail....

Both charge cards and credit cards can be used to pay for things on credit. The difference is that a charge card must be paid off in full every month, whereas you can pay off a credit card at your leisure - providing you pay the interest and the minimum monthly payments.

Credit cards have a defined credit limit which they tell you about, whereas charge cards don't tend to have credit limits as such. I guess that given you have to pay it off in full each month, there is a limit to how much debt you could run up against the card. No doubt if you tried to put a couple of 100 thousand pounds on a charge card you'd soon find out that there were some limits !

Charge cards often have an annual fee for the privilege of having one, but they often have some additional insurances or services as part of the deal.

American Express offer both charge cards and credit cards. They started out with the former but have offered credit cards too in recent years.

Personally, I can not really see a reason to pay for a charge card when you can get credit cards for free.

Clariman

sloth

a credit card gives you a line of credit (credit limit) and allows you to spend/balance transfer up to this limit over an indefinite period of time, in effect allowing you to roll your borrowing over month after month but at least paying back the min. payment (usually 2%)

a charge card allows you to charge any item to your card (they usually do not have a credit limit) but you must pay it all off at the end of that month. you are not allowed to roll your debt over

amex issueboth credit and charge cards. the one martin talks about is the platinum credit card which gives cashback

pin

Also should be noted charge cards are NOT protected by the Consumer Credit Act.

november

Thanks all

All becomes clear why I have never really heard of or considered charge cards! Also if AE do both that would explain my confusion.

( I didn't bother filling in the poll any way in the end - I got more interested in the question and wasn't that bored any more!)