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What is a Charge Card?

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What is a Charge Card?

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Not to be confused with a credit card, a charge card, is a means by which to purchase products and services on short-term credit. The most recognized company dealing in charge cards is American Express. Some other companies, including Diner’s Club. In certain situations, MasterCard has also been trying to build a presence in the charge card market. A charge card differs from a credit in a number of important factors. Understanding these factors is critical before using such a card. While many appreciate credit cards because they have the opportunity to make purchases and pay back the balance over time, often months or years, the charge card offers no such generous time frame. A charge card must be paid back by the due date of the next billing statement in full. Unlike a credit card, a charge card usually comes with no preset maximum credit line. However, if the charge card issuer believes you may be unable to pay the company back when a statement is issued, charging privileges could be

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A charge card is a plastic card much like a credit card, in that you can pay for goods and withdraw money using the card. However, unlike credit cards, the balance of a charge card has to be settled in full each month. The most common examples of charge cards are American Express and Diners Club cards, as well as some gold cards. Paying the balance in full The main feature of a charge card is that you have to pay the balance off in full each month. If you currently have a credit card and pay your balance off each month, then having a charge card would be very similar to this. Settling the balance each month means that you can budget an exact amount that you can afford to spend. However, you must remember that if you cannot pay off the balance then the penalty interest will be much higher than a normal credit card. No limits Another feature of charge cards is that there are no real pre-set spending limits on the card, meaning in theory you can spend what you want on it. This is brillian

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How is a charge card different from a credit card?. A charge card must be paid off in full each month. A credit card can revolve its balance from month to month. • American Express offers charge cards, credit cards and pre paid cards. • VISA and MasterCard brands are only on credit cards, debit cards and pre-paid cards. Probably the most well known charge card is the American Express Green Card. It was launched almost exactly 50 years ago on October 1, 1958. 250,000 cards were printed, on paper, at launch and become a big hit. The annual fee was $6 [Diner’s Club which launched in 1950 had an annual fee of $5]. Charge cards are a nice way to build your credit score, because they have to be paid off each month. They teach responsible use of plastic. Be careful though, the plastic card business has become more complicated and American Express has dozens of products to choose from, some of which are charge cards and some of which are credit cards. Make sure you read the fine print before y

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While this card works the same way as a credit card in theory, it can be extremely different in practice. Examples of charge cards are: loyalty-type cards offered by retailers such as J.C.Penney or the well respected American Express line of cards. The main difference is that, unlike a credit card where you choose how much you pay at the end of the month, a charge card needs to be cleared completely. There are pluses and minuses to this. By ensuring that you have to pay the whole balance instead of a minimum payment, this type of card can help you control your spending. There are some retailers, like Sears and J.C. Penney, who will allow your balance to carry over. However, because of this, there is usually a much higher interest rate charged on the unpaid balance.

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A charge card is not a credit card. You must pay off your charge card balance in full every month. A credit card usually gives you the option of paying only a portion of your balance (the minimum payment) and paying the rest over time. On your statement for your charge card, you will not see a periodic or annual percentage rate (APR). Be sure to check to see if you are being charged other fees for the use of the charge card, however, like annual or transaction fees. See also: What is the difference between a credit card and a charge card? What is a credit card? What is a debit card? What fees do credit cards have?

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