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What is the Big Difference Between Credit Cards and Charge Cards?

Oct 10, 2007
Just about everyone knows what a credit card is. It's the little piece of plastic with which you buy and pay on credit. Do you know what a charge card is?

Do you know that the two are very different from each other? Sometimes people are led to believe that a charge card and a credit card are the same thing. On the contrary, there are several differences between the two types of cards that determine how you use them and what you get out of them.

Credit Cards

Credit cards are beneficial to you if you need to buy on credit and can afford to pay on a balance along with the interest fees. It can be better to have a credit card because they have no annual fees and they allow you to pay off your debt when you like.

Charge Cards

If you are the kind of person who would be able to pay off your debt when the card company requires it, charge cards are a good investment. They allow you to buy things that you cannot pay for now, but because of the periodic pay off requirement, it keeps you from getting into debt further than you can escape from.

Whether you are willing to pay on interest rates and be allowed a credit balance or pay annual fees and get great rewards is up to you. Depending on what kind of spending you need to do and how well you will be able to pay it back are big factors to consider when comparing the two types of cards. There are benefits and pitfalls to both sides, but if you manage either or both of them wisely, you will be able to reap the benefits they bring and control the expenses they incur.

1. Another difference is that credit card holders must pay interest fees. This is because the card holders are not required to pay their debt in full periodically. They only have to pay the minimum monthly requirement.

Interest is where credit card companies make their money. Though they do not require you to pay your bill completely by a certain deadline, they do charge you interest for the entire time that you do not have it paid off.

2. One difference between a credit card and a charge card is that credit cards allow you to have a balance. Charge cards do not, because they require that you pay in full the amount that you charge on an annual basis.

This is how credit cards can be used for long periods of time without ever being paid off, though payments are made monthly that may reduce the balance, but never actually eliminate it. With a charge card, you must pay off the amount you owe periodically, no matter how great the amount is.

3. Credit cards give you the opportunity to pay off your balance whenever you want, but charge cards have more rewards. There is such a thing as a rewards credit card, but many charge cards outweigh these in benefits.

Depending on who the card holder is and what their spending habits are, preferences between charge cards and credit cards differ depending on the person. The different aspects of each can determine which one is the best for you.
About the Author
Court teaches people how to find the best credit card offers and helps people choose the right internet marketing strategy.
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