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Charge Card – No Limit Credit Card For Limitless Shopping

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When we talk about plastic money the very first thing that comes to our mind is debit card and credit card. Here is another card which falls in the category of plastic money i.e Charge card. Charge card is somewhat like credit card which can be used to make purchases and pay back at the end of billing cycle. You may be thinking if both the cards serve the same purpose than what is the need of charge card. Although both the cards offer similar services but there are some major difference which make both these cards apart from each other. Lets have a look how charge card is different from credit card (Charge Card vs Credit card).

charge card

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What Is A Charge Card?

A charge card is a specific kind of credit card issued by financial institutions which authorizes card holder to make purchase of good and services without any specified credit/spending limit (or much higher credit limit than credit card). It is a convenient substitute of cash or cheque.

Features Of Charge Card

  • The charge cards do not have any preset credit/ spending limit. Which means these cards make cardholder spend any amount of money without any limit.
  • Card holder have to make the full payment on the due date of card bill every month. Which means the amount of charge card bill cannot be postponed to another month for payment.

Benefits Of Charge Card

  • No interest on bill amount :- As the amount of bill cannot be postponed i.e customer have to pay complete bill on due date every months, customer will never fell in the situation to pay interest on late payment of bill amount.
  • Cannot lead to debt :- As the amount of bill cannot be postponed i.e customer have to pay complete bill on due date every months, customer will never fell in the situation of accumulated /pending large card bill.
  • Special Benefits :- Some charge cards offers special benefit which are not available on credit or debit cards.

Drawbacks Of Charge Card

  • Annual Fee :- Annual fees on charge cards are usually high.
  • Restricted Transactions :- Charge card do not allow every type of transaction for eg. balance transfer and cash advance facility is not available on charge cards.
  •  Penalty On Late Payment :- In case of non payment of bill on due date, customer will have to pay a percentage of the total bill as penalty and card will be suspended till the bill amount paid against the card.

What Is A Credit Card?

A credit card is a plastic card issued by financial institutions which authorizes card holder to make purchase of good and services on credit upto a specified credit/spending limit approved by the card-issuer. It is a convenient substitute of cash or cheque.

Features Of Credit Card

  • There is a pre-set credit/ spending limit on credit cards. Which means customer can spend only upto the specified credit limit, assigned by the card issuer depending upon the income of the customer.
  • Customer can make a minimum amount of payment on due date and can postpone the remaining bill to next the month billing cycle. Which means, card holder can make late payment of bill with interest on pending amount.

Benefits Of Charge Card

  • No Annual Fee :- Most of the card issuers do not charge any Annual fees on credit cards.
  • Balance Transfer :- Card holder can make payment of one card using another card to save interest.

Drawbacks Of Charge Card

  • Interest on late bill amount :- In case of bill postponement, customer will have to pay interest on pending bill.
  • Can lead to debt :- As the amount of bill can be postponed from one billing cycle to another which can lead to accumulation of large unpaid bill amount.

Charge Card Vs Credit Card

  • In credit card, card holder can carry forward bill amount from one billing cycle to another whereas in charge card, the entire amount of bill should be paid off on the due date every month i.e no postponement of bill from one month to another.
  • In credit card, in case of non payment of complete bill on due date card holder have to pay interest on the pending amount whereas in charge card, non payment of bill on due date can attract heavy penalty and suspension of card.
  • In credit card, there is a provision of minimum payment of the bill amount which allows card holder to pay a small amount of entire bill on due date and rest of the bill later whereas in charge card there is no such provision as card holder have to repay complete bill at the end of each month.
  • In credit card, card issuer specifies a credit/spending limit depending on the income & credit history of the customer whereas charge card offers much higher credit limit than credit card or sometimes unlimited.
  • Charge cards charges high annual fees whereas credit cards don’t.

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One comment

  1. part of old wine in a new differently shaped bottle; take the credit card .Pluck some feather here and stick a tailor two there charge card is ready.No end to innovation !!

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