What is the Difference Between Charge Card and Credit Card?

05/17/2025 • Matheus Moraes

The main differences between charge cards and credit cards are related to spending limits, payment requirements, and credit inquiries. Here are the key differences:

  1. Spending Limit: Charge cards typically do not have a preset spending limit, while credit cards do.
  2. Payment Requirements: Charge cards require the bill to be paid in full each month, with no option to carry a balance. Credit cards, on the other hand, allow you to make a minimum payment each month and carry the rest of the balance over to the next month.
  3. Credit Score Required: Credit cards can be obtained even with a bad credit score, while charge cards usually require a good credit score.
  4. Late Payment Fees: Both charge and credit cards may have late payment fees, but charge cards often have additional penalties if the balance isn't paid in full each month.
  5. Annual Fees: Charge cards typically have annual fees, while credit cards may have annual fees depending on the card.
  6. Availability: Charge cards are less common than credit cards.

In summary, charge cards offer more flexible spending options but require full payment each month, while credit cards have a set spending limit and allow you to carry a balance from month to month. Both types of cards may have annual fees and late payment fees, but charge cards often have additional penalties for unpaid balances.

Comparative Table: Charge Card vs Credit Card

The main difference between charge cards and credit cards lies in how they are paid off. Here is a table highlighting the key differences between the two:

Feature Charge Card Credit Card
Payment Balances must be paid off in full each month[^2^] Balances can be rolled over to the next month, with a minimum payment required[^2^]
Credit Limit No preset spending limit[^5^] Has a credit limit[^2^]
Interest No interest, as the balance is paid off in full each month[^3^] Interest is charged on carried balances[^3^]
Credit Score Impact Helps build credit through payment history and length of credit[^3^] Helps build credit through payment history, credit utilization, and length of credit[^5^]
Rewards Offers rewards and perks[^5^] Offers rewards and perks[^5^]

Both charge cards and credit cards can help build your credit when used responsibly. However, charge cards do not allow you to carry a balance from one month to the next, which may help prevent overspending[^2^]. On the other hand, credit cards offer more flexibility in terms of payment options and can be a better choice if you need to carry a balance when cash is tight[^3^].

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