Charge Card

A charge card is very similar to a credit card in looks and use. It is different from credit cards because the borrower is expected to pay this bill in full each month. Credit cards offer revolving charges that allow a minimum payment monthly and extended payment times. Charge card bills need to be paid in full by the due date or the account holder might incur hefty fees or have their card usage restricted.

Charge cards are offered by private companies like expensive retail stores, American Express, Diners Club and others. The first charge card ever offered was a paper card from Western Union in 1914. Diners Club saw charge cards as a money making opportunity for their business in 1957. By 1959, cards were printed o­n plastic and embossed for durability and use in charge card receipt machines. Other retailers offer their own credit cards with longer term payment options, interest charges and other fees. With a true charge card, there would be no interest or fees as long as the balance is paid in full each billing cycle.

There are charge card companies that do offer users an option for paying over a longer time period. Extended Payment Option is the term used at American Express for their program. This can be useful during travel and for higher priced purchases.

Some credit cards may also be used as debit cards. Charge cards are not that flexible but they are well received by merchants who understand the card holder normally has an excellent payment history. A charge card is better for those who are able to pay in full because they may offer higher limits or no limits o­n spending. As long as the monthly payment o­n a charge card is made in full, no problems should arise.