The Best Charge Cards (vs Credit Cards)

Do you have a charge card? Do you know what it is? Would you ever need one versus a debit card or a credit card? Today I'm going to look into charge cards: a bit of their history, their advantages / disadvantages, as well as some of the best charge cards available today.

History of the Charge Card

Do you ever wonder why we say “charge it” when we're using our credit card? Shouldn't we be saying “credit it”? Well, at one time all we had was a charge card. The charge card was introduced in 1950 by a company that would eventually become Diners Club.

Charge Cards vs. Credit Cards

A charge card is different from a credit card for several reasons.

  1. The balance is due in full each month.
  2. There is no minimum payment. The minimum is the entire balance.
  3. There are no interest charges.
  4. Late payment results in major fees and possible cancellation.
  5. It's not revolving credit, it's just a short-term loan.

Benefits of the Charge Card

Noting some of the points above, you can see that depending on your circumstances, the charge card can help you stay out of debt.

The charge card can also help you build a credit history. It can also help protect you from defective product purchased.

Lots of business owners typically find value in a charge card. Since they work like a short-term line of credit, they can help small business owners stay flexible during the month if cash flow is poor. At the same time, a charge card would discourage a business owner from racking up a bunch of revolving credit card debt.

Lastly, charge cards have perks. The charge card brings with it great service and access to rewards that you wouldn't normally get with a debit card or regular credit card. That is, except for the rewards checking account and debit card from PerkStreet, who offers 2% cash back.

The Downside of Charge Cards

Charge cards aren't without their negatives. They typically come with annual fees. Also, while a charge card helps your credit history it doesn't help your credit utilization since you don't have an approved spending limit, like that of a credit card revolving debt.

Charge Card Companies

Traditionally Visa/MasterCard have been the card company to provide debit and credit cards, while American Express has provided both credit cards and charge cards. Diners Club is also in the charge card business. Telly Savalas, baby!

What's your take? Do you have a charge card? Would you ever use one?

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Last Edited: January 30, 2017 @ 12:07 amThe content of is for general information purposes only and does not constitute professional advice. Visitors to should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.
About Philip Taylor

Philip Taylor, aka "PT", is a CPA, financial writer, podcaster, FinCon Founder, husband, and father of three. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or Google+. Listen to the new podcast, Masters of Money!


  1. I have credit cards though there are advantages to charge cards.  I pay my credit cards off every month (actually several times) as I really don’t relish paying interest to a bank that refuses to pay much interest to us on our own money.  While I have the option to have debt (and you never know what’s going to happen), I utilize my charge cards and just pay them off monthly. Past few years, I have paid 0% interest yearly on all my cards.  If I find that may go against me, I will just carry the very minimum on the card over. My credit cards do not carry an annual fee either.

  2. Pastor Jim Kibler says:

    The charge card is the way to go. No long term credit card debt.

  3. Yeah, I think the fees are pretty high. Like $95 for the Green Card listed above. I think that’s the cheapest.

  4. Jason @ One Money Design says:

    Informative post. I don’t have a charge card, but after reading your post, they wouldn’t be such a bad idea. Especially since you’re forced into paying them off each month. Do you know what you can expect in the yearly fee as compared to a credit card that earns points? Just curious about the difference, if there is any.

  5. I personally do not use a charge card but I would not be opposed to it since my main goal with using a credit card is just to use it for the cash back and then pay off the balance in full every month anyway.

  6. I usually try to use debit so I can see exactly what is being deducted but I may get a new card to try to charge more to get the rewards. I want some miles points.

  7. I’m aware of all of this, but I still don’t see the benefit of a charge card. You have to pay in full. Big whoop. You can do that with a credit card.

    Purchase protection and points are not part of the definition of a charge card. Besides, those benefits exist on some credit cards too.

  8. I did not know there was a distinction between these and credit cards. I don’t have a charge card and probably won’t apply for one.