The Ultimate Guide to Credit Cards
Thursday, October 28, 2021

What is a Charge Card? (Charge Card Definition + 3 Card Options)

What Is A Charge Card

credit card advice

Eric Bank
By: Eric Bank
Updated: November 15, 2019
Advertiser Disclosure

Most Americans shop using cash alternatives. Carrying cash around is inconvenient and risky, and paying by check is often a hassle. Furthermore, cash and checks will do you no good for your online purchases, as you will need some kind of account that allows you to pay for your items electronically.

One option is a charge card. Some people use this term interchangeably with credit cards, but charge cards differ from other card types in a number of ways. So, what is a charge card? Below, we’ll answer that question and take you through the ways in which they differ from other cards. We’ll also show you a few of the top charge cards available and some of the best alternatives.

Definition | How It Differs | Charge Card Options | Alternatives

Definition of a Charge Card

A charge card is defined by Investopedia as a card that charges no interest but requires the user to pay his/her balance in full upon receipt of the statement. You typically need a good-to-excellent credit rating to obtain a charge card, and using it responsibly can help burnish your credit history. The following is a summary of a charge card’s main characteristics:

  • You are expected to pay the balance in full on the monthly payment date.
  • There is no interest rate with a charge card, although annual fees and late charges apply.
  • There is no credit limit on a charge card, but that doesn’t give you unlimited spending.

Since there are no credit limits, charge card balances are not included in your credit utilization percentage and therefore don’t affect your credit score unless you fail to make timely payments. On-time payments are an important component in maintaining a healthy credit score.

How It Differs from Credit, Debit & Prepaid Cards

As mentioned, charge cards don’t extend credit beyond the monthly payment date and have no credit limit. Credit cards, by contrast, allow you to pay off your balance over many months, although you’ll have to pay interest on the unpaid amounts. Credit cards have a preset credit limit, and will decline purchases and/or apply penalty fees if you exceed the limit.

Debit cards are tied to your checking account, and will trigger overdraft charges or rejected transactions if you spend more than your balance. Prepaid cards link to cash accounts, and much like gift cards, only allow spending up to the amount credited to the card.

3 Popular Charge Cards

American Express dominates the charge card market, and you need to have a good-to-excellent credit score to qualify for these cards. Check out the following three Amex charge cards popular among consumers who qualify for them. All carry no interest charges, can earn rewards, and provide a number of premium services, such as extended warranties, travel accident insurance, and much more.

1. The Platinum Card® from American Express

The Platinum CardAmex Platinum Card provides 60,000 points when you spend $5,000 on purchases during the first three months. The annual fee is $550, and the card earns up to 5X Membership Rewards points. One of the more notable perks of this card is its annual $200 Airline Fee Credit when you fly on select airlines. Terms apply.

2. American Express® Gold Card

Amex Gold CardAmerican Express® Gold Card provides 25,000 points when you spend $2,000 on purchases during the first three months. The annual fee is $250 a year, which can be partially offset by the annual airline credit and monthly dining credits. The card earns up to 4X Membership Rewards points on dining and grocery store purchases. Terms apply.

3. American Express Green Card

Amex Green CardThe Green Card provides 25,000 points when you spend $1,000 on purchases during the first three months. The annual fee is $0 for the first year and $95 thereafter. The card earns 1X and 2X Membership Rewards points, and offers all of the purchase protections associated with being an Amex member. Terms apply.

(All information about the Green Card from American Express has been collected independently by CardRates.com. The Green Card from American Express is no longer available through CardRates.com.)

Alternatives to Charge Cards

Credit cards offer certain benefits not available with charge cards. They allow you to space out your payments over a number of months, can be obtained by folks with credit scores less than good (see our card reviews for poor credit), and generally offer a wider variety of targeted rewards for air miles, cash back, balance transfers, and business rewards.

Discover it® Cash Back Review

at Discover Card'ssecure website

GOOD CREDIT RATING

★★★★★
4.9

OVERALL RATING

4.9/5.0
  • INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
  • Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate.
  • Plus, earn unlimited 1% cash back on all other purchases - automatically.
  • Redeem cash back in any amount, any time. Rewards never expire.
  • Use your rewards at Amazon.com checkout.
  • #1 Most Trusted Credit Card according to Investor’s Business Daily.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 14 months
0% for 14 months
11.99% - 22.99% Variable APR
$0
Good/Excellent

GOOD CREDIT RATING

★★★★★
4.8

OVERALL RATING

4.8/5.0
  • Enjoy a one-time bonus of 60,000 miles once you spend $3,000 on purchases within 3 months from account opening, equal to $600 in travel
  • Earn unlimited 2X miles on every purchase, every day
  • Miles won't expire for the life of the account and there's no limit to how many you can earn
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Earn 5X miles on hotels and rental cars booked through Capital One Travel, where you'll get our best prices on thousands of trip options
  • Use your miles to get reimbursed for any travel purchase—or redeem by booking a trip through Capital One Travel
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
15.99% - 23.99% (Variable)
$95
Excellent, Good

GOOD CREDIT RATING

★★★★★
4.8

OVERALL RATING

4.8/5.0
  • $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year.
  • 3% cash back on dining at restaurants, including takeout and eligible delivery services
  • 3% cash back on drugstore purchases
  • 5% on travel purchased through Chase Ultimate Rewards®
  • Unlimited 1.5% cash back on all other purchases
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR on Purchases 15 months
N/A
14.99% - 24.74% Variable
$0
Good/Excellent
Chase Freedom Flex℠ Review

at the issuer'ssecure website

GOOD CREDIT RATING

★★★★★
4.8

OVERALL RATING

4.8/5.0
  • Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year.
  • 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
  • 3% cash back on dining at restaurants, including takeout and eligible delivery services
  • 3% cash back on drugstore purchases
  • 5% cash back on travel purchased through Chase Ultimate Rewards®, and 1% on all other purchases.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR on Purchases 15 months
N/A
14.99% - 24.74% Variable
$0
Good/Excellent

GOOD CREDIT RATING

★★★★★
4.8

OVERALL RATING

4.8/5.0
  • $0 annual fee and no foreign transaction fees
  • Earn a bonus of 20,000 miles once you spend $500 on purchases within 3 months from account opening, equal to $200 in travel
  • Earn unlimited 1.25X miles on every purchase, every day
  • Miles won't expire for the life of the account and there's no limit to how many you can earn
  • Earn 5X miles on hotels and rental cars booked through Capital One Travel, where you'll get our best prices on thousands of trip options
  • Use your miles to get reimbursed for any travel purchase—or redeem by booking a trip through Capital One Travel
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 15 months
0% for 15 months
14.99% - 24.99% (Variable)
$0
Excellent, Good

If you’re looking for payment flexibility, the ability to earn rewards in specific categories, and no annual fee — a credit card is the way to go.

Can You Afford to Pay the Balance Each Month?

Charge cards offer a convenient way for consumers with good or excellent credit scores to pay for purchases without using cash or checks. They have high annual fees, but you don’t have to worry about interest since you have to pay the balance each month. Of course, this means charge cards aren’t for everyone.

Credit cards, on the other hand, offer convenient financing, have lower annual fees, and offer more targeted rewards programs. If the idea of being responsible for paying your balance off each month makes you nervous, a traditional credit card may be the better option.

Advertiser Disclosure

CardRates.com is a free online resource that offers valuable content and comparison services to users. To keep this resource 100% free, we receive compensation from many of the offers listed on the site. Along with key review factors, this compensation may impact how and where products appear across the site (including, for example, the order in which they appear). CardRates.com does not include the entire universe of available offers. Editorial opinions expressed on the site are strictly our own and are not provided, endorsed, or approved by advertisers.