3 Key Differences — Charge Card vs. Credit Card + The Top 3 Amex® Cards

credit card advice

Eric Bank
By: Eric Bank
Posted: March 9, 2017
Opinions expressed here are ours alone, and are not provided, endorsed, or approved by any issuer. Site may be compensated through the issuer affiliate programs.

It’s easy to think that “charge card” is just another way to say “credit card,” but the two actually have very different meanings. Charge cards were once widely used, but the market for them has been largely conceded to American Express (Amex). Nowadays, consumers mainly turn to credit cards for their spending needs, as the rewards and perks can be very similar.

In this article, we’ll discuss the major differences between credit and charge cards, and take a close look at three top cards offered by Amex, as well as some of the top alternatives available with comparable benefits.

Differences (3) | Top Charge Cards (3) | Top Alternatives (10)

1. Charge Cards Don’t Have Pre-Set Spending Limits

Charge cards do have spending limits, it’s just that they aren’t pre-set. In other words, they can easily change over time and to accommodate special requests. You can contact the charge card company at any time (online, by phone, or via a mobile app) to check your current spending limit and to ask for a higher one. That limit is based on your financial resources and history — obviously, if you’ve missed payments in the past, it will count against you.

Credit cards come with less flexible spending limits. They can be increased over time, but not nearly as frequently as for charge cards, and the credit card companies will want to see some improvement in your credit score before it grants a significant increase. Timely payments will help in that regard.

2. You’re Required to Pay the Balance in Full Each Month

Unlike credit cards, charge cards require that you pay the full balance each month. That’s why there is no interest rate associated with a charge card, but there are stiff late fees if you don’t pay your balance on time. For Amex cards, the first late month costs $27, which grows to $38 on the second occurrence within the next six months. Two consecutive late payments will cost you the greater of $38 or 2.99% of the balance. Amex has a hybrid program called Pay Over Time that allows you to spread out the repayment of certain approved purchases, at a set financing rate.

Credit cards also charge late fees (on top of interest), and these fees may be higher than Amex’s. You avoid late fees (but not additional interest) as long as you make the minimum payment each month to the credit card company. Late credit card payments hurt your credit score, and late charge card payments may do so too – that is, if the card company reports it to the credit bureaus.

3. They Typically Have Hefty Annual Fees & Top-Notch Perks

American Express charges annual fees as high as $450. In return, you get generous rewards and money-saving perks, especially for travel-related activities. However, many credit cards now offer perks, and a few of them provide benefits as good or better than those offered by American Express — for example, see our review of the Chase Sapphire Preferred Credit Card.

Many credit cards don’t charge an annual fee, but don’t expect top rewards from them.

Top 3 American Express Charge Cards

American Express remains the only giant charge card issuer in the U.S. Diners Club runs a distant second. American Express also offers credit cards and travelers’ checks. Here are the three top Amex charge cards:

1. Amex Platinum Card

Although saddled with a $450 annual fee, the American Express Platinum Card is highly regarded for its generous rewards and benefits. The card charges no foreign transaction fees, and offers these benefits:

American Express Platinum

  • Signup bonus of 40,000 points when you make at least $3,000 in purchases during the first 3 months
  • You receive 5X points when you use the card to book flights with American Express travel or directly from the airlines
  • Receive a $200 airline fee credit and $200 for baggage fees annually, plus worldwide access to the Global Lounge Collection

There are no interest charges on purchases, but late fees are assessed if you don’t repay your monthly balance in full. The main drawback is the steep annual fee. You may want to evaluate our best credit card alternatives (see below) that charge less.

2. Amex Gold Card

The American Express Premier Rewards Gold Card cost less to own, but its rewards are less generous than those from the Platinum card. Still, the rewards are fairly liberal, especially if you travel a lot.

American Express Gold

  • Signup bonus of 25,000 points when you make at least $2,000 in purchases during the first 3 months
  • Receive 3X points when used to book flights with American Express travel or directly from the airlines, 2X points at gas stations, restaurants, and supermarkets, and 1X points on other purchases
  • Receive $100 airline fee and $100 baggage fee credit annually

The annual fee of $195 is waived for the first year. You do not get access to the Global Lounge Collection, but there are no foreign transaction fees.

3. Amex Business Platinum Card

If your job requires frequent travel, the American Express Business Platinum Card might be perfect for you. The $450 annual fee lets you earn hefty rewards, and the signup bonus is generous, allowing for an additional 25,000 bonus points — 75,000 total — if you spend another $10,000 in the same 3-month period.

American Express Business Platinum

  • Signup bonus of 50,000 points when you make at least $10,000 in purchases during the first 3 months
  • Receive 2X points when used to book flights with American Express travel or directly from the airlines, 1.5X points for qualifying purchases of $5,000 or more, and 1X points on everything else
  • Receive a $200 airline fee credit for incidental fees annually

The card rebates certain fees for TSA Precheck and Global Entry, allows access to the Global Lounge Collection, and provides a 50% additional airline bonus for first-class and business-class flights booked with the card. Drawbacks include the high annual fee and the fact that Amex cards are accepted at fewer places than are Visa and MasterCard credit cards.

Top 10 Charge Card Alternatives

Before you spend big bucks on charge card annual fees, check out our list of the best overall credit cards. You’ll find cards with low or no fees, as well as cards with generous rewards, signup bonuses, and plenty of other benefits.

Discover it® Cashback Match™ Review

at Discover'ssecure website

  • Our Take: "One of our favorite cards, with long 0% intro APRs, low ongoing APRs, awesome cash back rewards, and lots more.
  • 5% cash back in categories that rotate quarterly, up to $1,500 per quarter when you sign up for the quarterly bonus
  • 1% cash back on all your other purchases
  • Matches the cash back you've earned at the end of your first year (only for new cardmembers)
  • No limit to the amount of cash back that can be matched"
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 14 months
0% for 14 months
11.49% - 23.49% Variable
$0
Excellent/Good

BEST OVERALL RATING

★★★★★
5.0

OVERALL RATING

5.0/5.0
  • Unlimited 1.5% cash back on every purchase — it's automatic
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.49-24.24%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • Redeem for cash — any amount, anytime
  • Cash Back rewards do not expire as long as your account is open
  • No annual fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 15 months
0% for 15 months
15.49% - 24.24% Variable
$0
Excellent/Good

BEST OVERALL RATING

★★★★★
5.0

OVERALL RATING

5.0/5.0
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
  • Unlimited 1% cash back on all other purchases — it's automatic
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 15.49-24.24%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • Enjoy new 5% categories every 3 months
  • Cash Back rewards do not expire as long as your account is open
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 15 months
0% for 15 months
15.49% - 24.24% Variable
$0
Excellent/Good

BEST OVERALL RATING

★★★★★
4.9

OVERALL RATING

4.9/5.0
  • Enjoy a one-time bonus of 20,000 miles once you spend $1,000 on purchases within 3 months of approval, equal to $200 in travel
  • Earn unlimited 1.25 miles per dollar on every purchase, every day and pay no annual fee
  • Fly any airline, stay at any hotel, anytime
  • Enjoy a low intro APR on purchases for 12 months; 12.49%-22.49% variable APR after that
  • Travel when you want with no blackout dates
  • No foreign transaction fees
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 12 months
N/A
12.49% - 22.49% (Variable)
$0
Excellent, Good Credit
Discover it® 18 Month Balance Transfer Offer Review

at Discover'ssecure website

BEST OVERALL RATING

★★★★★
4.9

OVERALL RATING

4.9/5.0
  • Our Take: "With a ridiculously good deal on balance transfers, low APR's, and a generous cash-back program, we can see why this card is so popular.
  • 0% Intro APR on balance transfers for 18 months
  • 5% cash back in rotating categories that rotate quarterly, up to $1,500 per quarter when you sign up for the quarterly bonus
  • 1% cash back on all your other purchases.
  • Matches the cash back you've earned at the end of your first year (only for new cardmembers)
  • No limit to the amount of cash back that can be matched"
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 6 months
0% for 18 months
11.49% - 23.49% Variable
$0
Excellent/Good

BEST OVERALL RATING

★★★★★
4.9

OVERALL RATING

4.9/5.0
  • Earning unlimited 2% cash back could mean thousands of dollars each year going back into your business
  • Plus, a one-time $500 cash bonus once you spend $4,500 on purchases within 3 months of approval
  • Use Spark Cash across all your business spend, with no categories to limit your purchasing
  • $0 intro annual fee for the first year; $59 after that
  • Rewards don't expire, and you can redeem your cash back for any amount, anytime
  • Get employee cards at no additional cost, and earn rewards from their business spend
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
17.49% (Variable)
$0 intro for first year; $59 after that
Excellent, Good Credit
Wells Fargo Cash Wise Visa® Credit Card Review

at Wells Fargo'ssecure website

BEST OVERALL RATING

★★★★★
4.9

OVERALL RATING

4.9/5.0
  • Earn $150 cash rewards bonus after spending $1,000 in the first 3 months
  • Earn unlimited 1.5% cash rewards on virtually every purchase
  • Enjoy 1.8% cash rewards on qualified mobile wallet purchases, like Apple Pay® or Android Pay™, during the first 12 months from account opening
  • Cash rewards don't expire as long as your account remains open
  • $0 Annual Fee
  • 0% Intro APR for 12 months on purchases and balance transfers, then a 13.74%-25.74% variable APR; balance transfer fees apply
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 12 months
0% for 12 months
13.74%-25.74% (Variable)
$0
Excellent/Good
Discover it® Miles – Unlimited 1.5x Rewards Card Review

at Discover'ssecure website

BEST OVERALL RATING

★★★★★
4.8

OVERALL RATING

4.8/5.0
  • Our Take: "If you're looking for a card that gives you air miles, your search is over. This card helps you earn free flights with multiple airlines, awards very generous bonuses, and offers a low APR to boot.
  • Earn unlimited 1.5x Miles on every dollar spent
  • Cover travel costs by redeeming the miles in any amount for a statement credit
  • Fly any airline, any time
  • No blackout dates
  • At the end of your first year, the card automatically matches the miles you've earned (only for new cardmembers)"
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 14 months
10.99% for 14 months
11.49% - 23.49% Variable
$0
Excellent/Good
Discover it® chrome Review

at Discover'ssecure website

BEST OVERALL RATING

★★★★★
4.8

OVERALL RATING

4.8/5.0
  • Our Take: "What's not to love? Great intro rates, low ongoing APR, cash-back rewards, and great customer service make this card a solid choice
  • 2% cash back at gas stations and restaurants, up to $1,000 per quarter
  • 1% cash back on all your other purchases, with no limits
  • Matches the cash back you've earned at the end of your first year (only for new cardmembers)
  • No limit to the amount of cash back that can be matched"
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 14 months
0% for 14 months
11.49% - 23.49% Variable
$0
Excellent/Good
Barclaycard CashForward™ World MasterCard® Review

at Barclaycard'ssecure website

BEST OVERALL RATING

★★★★★
4.8

OVERALL RATING

4.8/5.0
  • Get a $100 cash rewards bonus after you spend $500 in purchases in the first 90 days after account opening
  • Earn unlimited 1.5% cash rewards on every purchase
  • Every time you redeem, get a 5% cash rewards redemption bonus to use toward your next redemption
  • Redeem your cash rewards for a deposit into your bank account, a statement credit or gift cards. Redemptions start at $50
  • Cash rewards do not expire as long as your account is open, active and in good standing
  • 0% introductory APR for 15 months on Balance Transfers made within 45 days of account opening. After that a variable APR will apply, 15.24%, 20.24% or 25.24%, based on your creditworthiness.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
0% for 15 months (on balance transfers made within 45 days of account opening)
15.24%, 20.24% or 25.24% Variable
$0
Excellent Credit

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Are You a Good Charge Card Candidate?

A charge card is not your best choice if you like spreading out your payments over several months, or if you don’t want to pay annual fees. Another reason to favor credit cards is to boost your credit rating. However, if you travel a lot, want top rewards and have the budget for annual fees and full payments each month, a charge card might fit the bill.