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 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
American 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
The 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.
- 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, and gas stations, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases - automatically.
- Discover could help you reduce exposure of your personal information online by helping you remove it from select people-search sites that could sell your data. It’s free, activate with the mobile app.
- Every $1 you earn in cash back is $1 you can redeem.
- Get a 0% intro APR for 15 months on purchases. Then 16.74% to 27.74% Standard Variable Purchase APR applies, based on credit worthiness.
- No annual fee.
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% Intro APR for 15 months
|
0% Intro APR for 15 months
|
16.74% - 27.74% Variable APR
|
$0
|
Excellent/Good
|
- 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, and gas stations, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
- Discover could help you reduce exposure of your personal information online by helping you remove it from select people-search sites that could sell your data. It’s free, activate with the mobile app.
- Every $1 you earn in cash back is $1 you can redeem.
- No annual fee.
- Click through to Discover’s website to see terms and conditions.
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% Intro APR for 6 months
|
0% Intro APR for 18 months
|
16.74% - 27.74% Variable APR
|
$0
|
Excellent/Good
|
- INTRO OFFER: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back!
- Enjoy 6.5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 4.5% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 3% on all other purchases (on up to $20,000 spent in the first year).
- After your first year or $20,000 spent, enjoy 5% cash back on Chase travel purchased through Ultimate Rewards®, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1.5% cash back on all other purchases.
- No minimum to redeem for cash back. You can choose to receive a statement credit or direct deposit into most U.S. checking and savings accounts. Cash Back rewards do not expire as long as your account is open!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 19.74% - 28.49%.
- No annual fee - You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
0% Intro APR on Purchases 15 months
|
0% Intro APR on Balance Transfers 15 months
|
19.74% - 28.49% Variable
|
$0
|
Good/Excellent
|
- Enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 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®
- Enjoy two complimentary visits per year to Capital One Lounges or to 100+ Plaza Premium Lounges through the Partner Lounge Network
- Earn 5X miles on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options
|
Intro (Purchases)
|
Intro (Transfers)
|
Regular APR
|
Annual Fee
|
Credit Needed
|
|---|---|---|---|---|
N/A
|
N/A
|
20.74% - 28.74% (Variable)
|
$95
|
Excellent, Good
|
- $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 Capital One's 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
|
19.74% - 29.74% (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.
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Editorial Note: Our site content is not provided or commissioned by any credit card issuer(s). Opinions expressed on CardRates.com are the author's alone, not those of any credit card issuer, and have not been reviewed, approved, or otherwise endorsed by credit card issuers. Every reasonable effort has been made to maintain accurate information; however, all credit card offer details, including information about rewards, signup bonuses, introductory offers, and other terms and conditions, is presented without warranty. Clicking on any offer on CardRates.com will direct you to the issuer's website, where you can review the current terms and conditions of the offer.
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