Charge Card vs. Credit Card: Should You Have Both or Choose One?

Charge card vs credit card? Hmm…

If you are an average person coming of age who thinks of working overseas, getting a loan from the bank, or just want to have more choices to pay online, you may need a credit card. 

In fact, only Americans are currently using 511 million credit cards. 

Even if you are from the other part of the world, chances are Visa or MasterCard credit cards (or perhaps even both) are in your pocket.

While many people open and use credit cards, charge cards seem somewhat of a mystery. 

Even so, when the question is charge card versus credit card.

Let’s have some cold hard facts before diving into what card is best in a particular case.

What Is a Charge Card?

As a way of making purchases, charge cards are quite similar to credit cards. In both cases, the bank is paying to the retailer, charity, or service on your behalf. It appears that the only difference between a credit card and a charge card is that the latter does not charge any interest but requires you to pay the money you borrowed in full by the end of the month. 

Whether you borrow $100 or $10 000 dollars from the bank you must repay the single penny of that sum within a month or so. Want to get a bit more details to see if a charge card vs credit card is best for your budget and lifestyle? Read further down below.

What Is a Credit Card?

If you are in your late teens chances are you already know what credit card is and how to use it. Perhaps, you are a credit card holder yourself, or have been added to your Mom’s or Dad’s credit account as an authorised user.

Still, it is important to know that unlike the charge card, a credit card requires you to pay the borrowed money plus applicable interest and any additional fees or charges. Credit cards are one of the most common ways of payment. You shop online and in stores using a credit card to pay bills, buy groceries, and donate to charities. The 4 major credit cards globally used are Visa, MasterCard, Discover,  and American Express.

Charge Card Pros & Cons

Let’s get our charge card vs credit card question answered – count the pros and cons of the former. In short, charge cards seem to favour people with bigger budget and needs. 


  • No APR (Purchase Annual Percentage Rate) for people who can afford to pay back the borrowed money in full by the end of the month. Simply put, no interest accrues by the end of the year.
  • Prevents fraudulent operations through purchase protection.
  • Spending limit is not set (if you are poor with managing money then, this is a con rather than a pro for you).
  • Great deal of rewards for holders: car and baggage insurance to travel perks, and exclusive memberships.
  • Used wisely and responsibly can help you build your FICO score (credit score).


  • Have an annual fee, and quite often one-time membership fee.
  • One of the limited options is American Express charge cards. There seems to be no other major issuer of the charge cards.
  • You may dent your credit score much worse than with a credit card, if you are unable to pay off your charge card bill in full.
  • Inability to pay a charge card bill will result in the charge card membership termination and most likely a heavy interest charge.

Credit Cards Pros & Cons

You may know that credit cards are used to make purchases, protect against unauthorized charges, and you can get cashback or bonuses sometimes. But to know the answer to the “charge card vs credit card” question you might want to look at credit card pros and cons first. 


  • A sure way to build a credit history for a better credit score. A credit history factually is your reputation for banks and credit companies (lenders) and can impact your ability to borrow money or open a credit card with a particular bank.
  • You get rewards, just like with charge cards. Anything from cashback from grocery shopping to airline miles, tickets to gift cards.
  • Low APR for an introductory period. Interest rates for such periods can be as low as 0%.
  • A common way to make payments. While you can choose between cash and credit cards shopping for groceries (not everywhere though), you must provide card details for hotel bookings or car rentals.It helps them reclaim additional expenses you make (if any).
  • Purchase protection for a limited time. If the item you bought was accidentally damaged, lost, or stolen, you can ask for up to $1000 per claim and $50,000 per cardholder to be returned to your wallet. On average, purchase protection works for 90-120 days from the day of purchase.
  • Credit cards while traveling abroad can save you money, because some local charges and or commissions are not applied.


  • Typically, buying anything with a credit card means a higher cost of purchases because of the APR (annual interest rate accrued on borrowed money), late-payment fees, and service fees (if any).
  • High possibility of unmanageable credit card debt. A credit card gives an illusion of having more funds than a person may actually have or is able to get any time soon.

Charge Card vs Credit Card:  At Glance

While for now you might have some idea which card is going to be more suitable for your budget and needs, you still should look how charge card vs credit card work in practice, right?

Let’s compare the two most common charge and credit cards: The Platinum Card from American Express and Blue Cash Preferred Card from the same credit provider. We’ve listed the key points of both cards, which seem to be quite popular these days, given the 5-star rating by Nerdwallet, the blog for money-wise people.

Blue Cash Preferred credit card is best known for its generous cash backs. Meanwhile, the Platinum Card has earned an “affordable luxury” reputation. The latter is mistakenly called a credit card thanks to its Pay Over Time feature recently introduced by the American Express.

Yet, AmEx Platinum (or Gold) Card was introduced and remains a charge card since payment is due in full by the end of the month.

Charge Card vs Credit Card: Platinum Card from American Express or AmEx Blue Cash Preferred?

AmEx  Platinum Card
(charge card)
AmEx Blue Cash Preferred Card (credit card)
Level&Tap RatingLevel&Tap Rating
Welcome BonusWelcome Bonus
75,000 points Membership Reward points as for holders who spent $5000 in purchases in the first 6 months after opening a card. According to Rewards Points Calculator that is a $525-dollar worth reward for Walmart, BestBuy, Amazon, etc., or $750 dollars to use for NYC Taxi. Once a new cardholder spends $1000 dollars on purchases within the first 3 months after the card is issued, he/she will receive a $250 reward
Cashback From PurchasesCashback From Purchases
– No, but cardholders earn redeemable points from every purchase. 
– Points do not expire and do not have a limit. You can redeem points for gift cards, Amazon shopping, hotel bookings, or air miles, and travel points for 17 airline partners. – For traveling, this translates to up to $200 airline fee credit.
$75-$100 credit for hotels.
6% cashback at U.S. supermarkets on up to $6,000 per year in purchases (after 1% cashback).
6% cashback on select U.S. streaming subscriptions (Apple Music, YouTube Premium, Spotify, Netflix, Hulu, HBO Now, etc.)
3% cash back at U.S. gas stations and on transit (including taxis/Uber, parking, tolls, trains, buses, and more).
1% Cash Back on other purchases.
Annual FeesAnnual Fees
$550 dollars$95 dollars
Recommended Credit ScoreRecommended Credit Score
700 – 850 (good – excellent)690 – 850 (good – excellent)
APR (Annual Rate of Interest)APR (Annual Rate of Interest)
0% introductory APR 
15.99% – 22.99% APR for Pay Over Time feature
0% APR: for 12 months since account opening.
Then, 13.99% to 23.99% APR.
Charge Card vs Credit Card: Comparison Chart

Charge Card vs Credit Card: Payment Terms

Payment Terms are the first thing to keep in mind when comparing charge cards vs credit cards. While you can extend your payment for some time and pay only the monthly minimum for a credit card, charge cards require you to pay off the due payment completely within a month period. If you are unable to pay the charge card balance in full by the end of the month, you may incur additional charges and late penalties, decrease your credit score, and lose all privileges, rewards, bonuses you have as a certain charge cardmember.

When deciding if a charge card vs credit card is best to stick with, keep in mind that a charge card while tempting requires the availability of stable funds falling into your wallet each month. Otherwise, taking more money than you could afford every month may bring some serious problems to you and result in no card issuer lending you money. Yet, some cards are starting to introduce the option to pay over time. With a certain interest, of course.

On the other hand, credit cards are perfect situation-saviers when you want to buy something big, say furniture, but unable to pay the full price in one. The downside is a quite high interest rate compared to zero interest rate for charge cards.

Charge Card vs Credit Card: Spending Limits

Your credit limit, or spending limit, is the maximum amount of money you can use to pay for goods and services before getting a penalty from the card issuer. 

Somewhere above we’ve already mentioned no minimum spend on charge cards. Isn’t that one of the most attractive features for you? Unless you get a hefty six-figure income and know how to manage personal finances, I doubt the “spend as much as you want” approach would work for your advantage.

The standard “charge card vs credit card” this time gives more points to credit cards when it comes to spending (credit) limits. Some credit companies allow cardholders to set spending limits per transaction for as low as $200 dollars. You can also block authorized user charges over $100 spent. There are companies that allow you to set a spending limit for both authorized and unauthorized users.

Charge Card vs Credit Card: Annual Fees

The annual fee is the x amount of money paid by the cardholder to the card issuer each year to keep using the card and accessing its benefits or rewards. In our charge card vs credit card research, it’s clear that annual fees mostly relate to charging cards than to credit cards. Some of the most prestigious charge cards like Gold and Platinum Card from AmEx, Centurion Card from American Express, and American Express Green card have annual fees ranging from $150 dollars to $5000 dollars (Centurion Card). From the few charge cards in active use, Brex Corporate Card for Startups has a $0 dollar annual fee.

Unlike the charge cards, for most credit cards there are no annual fees: Discover it: Cash Back, Chase Freedom Unlimited, etc. The more card names and issuers for charge card vs credit card are in the available options down below. Even when they require a cardholder to pay a fee each year, it still is very much within the average range of $100 dollars. 

Charge Card vs Credit Card: Available Options

The best known, and of not the only, card issuer for charge cards is American Express. 

The choice is accordingly limited to the two best known charge cards: The Platinum Card from the American Express, and AmEx Gold Card. Because of the same card issuer, both cards share travel points, welcome rewards points, annual fees, yet vary in range and variety. Platinum Card holders typically have more access to all sorts of luxury such as VIP lounges, 24/7 concierge to arrange flights and personal shopping, Uber credits and airline fee credits, etc.)

As for the credit cards, there are plenty of credit card companies and types of credit cards to choose from. A handful of best credit cards to try are listed below.

  • Chase Sapphire Reserve from Chase 
  • Citi Double Cash Card from Citi 
  • Inc Business Preferred from Chase
  • Blue Cash Preferred from American Express
  • Cash Rewards Credit Card from Bank of America
  • Blue Cash Everyday from American Express
  • Capital One Venture Rewards credit card from Capital One
  • Visa Platinum Rewards Credit Card from Alliant
  • Discover it: Cash Back card from Discover bank
  • SavorOne Cash Rewards card from Capital One

Listing more credit cards will fill the entire page and make it look like the card directory rather than a charge card vs credit card review. With the exception of a Blue Cash Preferred credit card, none of the above cards have annual fees. The regular APR starts from 11.99%.

Now, would you rather open a credit card or choose a charge card? What’s your charge card vs credit card POV? Let us know in the comments down below if we missed anything, enriched your knowledge of the card system, or might have added the information here with a bit more details.