Credit Cards and Charge Cards are both a convenient way of paying for goods or services around the world, in person or online. Every time you use them you are taking out a loan, in effect, for purchases where the money is not being immediately withdrawn from your account. The main difference stands in how you repay these back.
What is a Charge Card?
A Charge Card basically defers your payment to the end of the balance month when you are required to pay the amount you have charged to the Card in full. To add value to your everyday spending, American Express Charge Cards come with an extensive range of rewards and benefits, like travel insurance, purchase protection, and fraud guarantee.
A Charge Card lets you manage and maximise your cash flow: you have great purchasing power with no pre-set spending limit. Although it does not mean your spending is unlimited! Your purchases are approved based on a set of factors, including current spending patterns, payment history, credit records, and known financial resources.
What is a Credit Card?
A Credit Card offers a revolving line of credit, so you can carry a balance from one month to the next, rather than having to pay the full amount you owe every month. If the account is not paid in full at the end of the month, the outstanding balance is carried over to the next. Every month you are required to pay back at least a minimum amount towards the closing balance. Interest is charged on the remaining, unpaid balance.
To pay off the balance faster and to minimise or avoid interest charges, you should aim to pay more than the minimum monthly repayment. If you always pay your balance in full and on time and don’t access cash advances, then no interest charges are applicable.
*Here is a tip: if you have an outstanding balance carried over from the month before; if you pay your monthly bill sooner than the due date, you can save on interest charges.
Charge Card – your balance should be paid in full each month.
Credit Card – you can carry over your balance to the next month.
Learn more about the American Express balance transfer offer
Charge Card – no pre-set credit limits as long as you repay your balance in full and avoid incurring penalty fees.
Credit Card – your spending limits are determined when applying for a new Card. Find out more information about the application process here.
Charge Card – Interest rates will not apply to Charge Cards since there is no revolving line of credit.
Credit Card – Interest rates can sometimes differ depending on the Card. Paying your balance regularly and before the end of the month will allow you to pay no interest.
Charge Card – The main cost of an American Express Charge Card will consist in the annual fee depending on the Card you apply for.
Credit Card – Charges coming with your American Express may include the annual fee (depending on the Card) and interest rates applied to your Card should you not pay your balance in full.