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What Is a Charge Card?

What Is a Charge Card?

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated May 29, 2020. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

From just looking at them, you wouldn’t know that charge cards are any different from credit cards. But though they look and act like credit cards, charge cards have some major differences.

Charge cards vs. credit cards

The most notable difference between charge cards and credit cards is that credit cards allow cardholders to revolve a balance from month to month, as long as they meet the minimum payment due each statement period. Whereas charge cards typically require cardholders to pay the balance in full every billing cycle.

You could say that charge cards, such as the Diners Club card by Discover in 1950, gave birth to the credit card. However, as time went on, American Express was the only major issuer that continued to offer consumer and business charge cards in the United States. And nowadays, American Express has moved away from charge cards, though the the issuer still offers cards with no preset spending limit (more on how that works in the next section).

Note that some American Express cards offer the Pay Over Time feature, which lets you carry a balance with interest on eligible charges — up to your Pay Over Time limit, which is set by Amex. When an Amex charge cardholder elects this option, the card is essentially functioning like any other credit card.

How do cards with no preset spending limit work?

With most credit cards, you have a set amount of money from which to borrow, which is called your credit limit. This is set by the issuer when you’re approved for a card, and takes factors such as income and length of credit history into account. Some American Express cards, by contrast, have no preset spending limit.

This does not mean you’ll be able to spend an unlimited amount, however. American Express does limit your spending based on your use of the card, payment history, credit record, financial resources and other factors. And how much you can spend on the card may adapt over time.

Will a card with no preset spending limit build credit?

In short, yes, although to a much lesser degree. While the account will be reported to the credit bureaus, since there is no preset spending limit, the card’s balance won’t factor into your credit utilization ratio (which accounts for 30% of your FICO Score).

So, while keeping balances low on your credit cards will lower your credit utilization ratio and boost your credit score, purchases made on a card with no preset spending limit won’t have any impact.

A rule of thumb is to use no more than 30% of your available credit lines on credit cards. For example, on a credit card with a $2,000 limit, your balance should be no larger than $600.

Read: How to Calculate Your Credit Utilization.

Cards to consider

If you’re looking for a card with a flexible spending limit that adapts based on your purchase and payment history, as well as your credit, these are worth considering:

American Express® Green Card

This card is best for travelers and foodies looking to earn generous rewards on purchases including flights, subway rides and dining out at restaurants.

Rewards: Earn 3X Membership Rewards® Points on Restaurants worldwide, including takeout and delivery. Additionally, earn 3X Membership Rewards® points on all eligible travel, from subway swipes and window seats to hotel stays and city tours.

Welcome offer: 30,000 Membership Rewards® points after you spend $2,000 on purchases on your new Card in your first 3 months.

Annual fee: $150

Additional benefits:

  • Up to $100 annual credit for airport lounge access via LoungeBuddy.
  • Up to $100 annual credit toward membership with the CLEAR security program.
  • Trip delay insurance and baggage insurance plan.
  • Car rental loss and damage insurance.
  • Global Assist Hotline access when traveling more than 100 miles from home.
  • Purchase protection and extended warranty.
  • Complimentary ShopRunner membership (enrollment required) with free two-day shipping on eligible items.
  • Exclusive access to events such as Broadway shows, concerts and sporting events.
  • Terms apply.

Read our review of the American Express® Green Card.

American Express® Gold Card

American Express® Gold Card

Apply Now

on American Express's secure site

Terms Apply

Rates & Fees

  • Earn 60,000 Membership Rewards® Points after you spend $4,000 on eligible purchases with your new Card within the first 6 months.

  • Earn 4X Membership Rewards® Points at Restaurants, including takeout and delivery, and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), and 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com. Terms apply.

  • $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub, Seamless, The Cheesecake Factory, Ruth's Chris Steak House, Boxed, and participating Shake Shack locations. This can be an annual savings of up to $120. Enrollment required.

Highlights
  • Rose Gold is back. You can now choose between Gold or Rose Gold.
  • Earn 60,000 Membership Rewards® Points after you spend $4,000 on eligible purchases with your new Card within the first 6 months.
  • Earn 4X Membership Rewards® Points at Restaurants, including takeout and delivery, and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub, Seamless, The Cheesecake Factory, Ruth's Chris Steak House, Boxed, and participating Shake Shack locations. This can be an annual savings of up to $120. Enrollment required.
  • Get up to 12 complimentary months of an Uber Eats Pass subscription when you enroll with your Gold Card by 12/31/21.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees

See additional details for American Express® Gold Card

More Info

This card serves consumers who want valuable credits for dining and rideshares, as well as generous rewards on dining, supermarket purchases and flights.

Rewards: Earn 4X Membership Rewards® Points at Restaurants, including takeout and delivery, and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), and 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com. Terms apply.

Welcome offer: 60,000 Membership Rewards® Points after you spend $4,000 on eligible purchases with your new Card within the first 6 months.

Annual fee: $250

Additional benefits:

  • Up to $10 a month in statement credits for Grubhub, Seamless, The Cheesecake Factory, Ruth’s Chris Steak House, Boxed and participating Shake Shack locations. Enrollment required.
  • Add your American Express® Gold Card to your Uber account, and automatically get $10 in Uber Cash each month (for a total of up to $120 per year) to use on Uber Eats or Uber rides in the U.S.
  • Baggage insurance plan.
  • Car rental loss and damage insurance.
  • Global Assist Hotline access when traveling more than 100 miles from home.
  • Benefits when staying at a property in The Hotel Collection.
  • Discounts and amenities by enrolling in The Travel Collection by Travel Leaders Group.
  • Use the Personalized Travel Service to book travel and make arrangements by phone.
  • Complimentary ShopRunner membership with free two-day shipping on eligible items (enrollment required).
  • Exclusive access to events such as Broadway shows, concerts and sporting events.
  • Take advantage of Amex Offers for shopping, dining, travel purchases and more, enrollment required.
  • Get access to premium seats and select events via the Preferred Seating benefit.
  • Terms apply.

To see rates & fees for American Express® Gold Card please click here.

Read our review of the American Express® Gold Card.

The Platinum Card® from American Express

The Platinum Card® from American Express

Apply Now

on American Express's secure site

Terms Apply

Rates & Fees

  • Earn 100,000 Membership Rewards® Points after you spend $6,000 on purchases on the Card in your first 6 months of Card Membership.

  • Earn 10x points on eligible purchases on the Card at restaurants worldwide and when you Shop Small in the U.S., on up to $25,000 in combined purchases, during your first 6 months of Card Membership.

  • Enjoy Uber VIP status and up to $200 in Uber savings on rides or eats orders in the US annually. Uber Cash and Uber VIP status is available to Basic Card Member only.

Highlights
  • Earn 100,000 Membership Rewards® Points after you spend $6,000 on purchases on the Card in your first 6 months of Card Membership.
  • Plus, earn 10x points on eligible purchases on the Card at restaurants worldwide and when you Shop Small in the U.S., on up to $25,000 in combined purchases, during your first 6 months of Card Membership.
  • Earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel up to $500,000 on these purchases per calendar year and earn 5X Membership Rewards® Points on prepaid hotels booked with American Express Travel.
  • $200 Hotel Credit: Get $200 back in statement credits each year on prepaid Fine Hotels + Resorts® or The Hotel Collection bookings with American Express Travel when you pay with your Platinum Card®.
  • $240 Digital Entertainment Credit: Get up to $20 in statement credits each month when you pay for eligible purchases with the Platinum Card® at your choice of one or more of the following providers: Peacock, Audible, SiriusXM, and The New York Times. Enrollment required.
  • $155 Walmart+ Credit: Cover the cost of a $12.95 monthly Walmart+ membership with a statement credit after you pay for Walmart+ each month with your Platinum Card. Cost includes $12.95 plus applicable local sales tax.
  • American Express has expanded The Centurion® Network to include 40+ Centurion Lounge and Studio locations worldwide. Now there are even more places your Platinum Card® can get you complimentary entry and exclusive perks.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year in baggage fees and more at one select qualifying airline.
  • $200 Uber Cash: Enjoy Uber VIP status and up to $200 in Uber savings on rides or eats orders in the US annually. Uber Cash and Uber VIP status is available to Basic Card Member only.
  • $300 Equinox Credit: Get up to $25 back each month on select Equinox memberships when you pay with your Platinum Card®. Enrollment required.
  • $179 CLEAR® Credit: Use your Card and get up to $179 back per year on your CLEAR® membership.
  • $695 annual fee.
  • Terms Apply.
  • See Rates & Fees

See additional details for The Platinum Card® from American Express

More Info

This card is geared toward frequent travelers willing to pay a lavish price for top-of-the-line benefits.

Rewards: 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel on up to $500,000 on these purchases per calendar year and 5X Membership Rewards® points on prepaid hotels booked with American Express Travel. Terms apply.

Welcome offer: 100,000 Membership Rewards® Points after you spend $6,000 on purchases on the Card in your first 6 months of Card Membership.

Annual fee: $695

Additional benefits:

  • Access to more than 1,200 airport lounges via the Global Lounge Collection. Enrollment required for Priority Pass lounges.
  • Annual credit of up to $200 for incidental airline fees (enrollment required).
  • Fee credit of up to $100 for Global Entry, or $85 for TSA Precheck.
  • Uber VIP status and up to $200 annually in Uber Cash.
  • Benefits when staying at a property in The Hotel Collection.
  • Benefits when staying at a Fine Hotels & Resorts property.
  • Platinum Travel Service to help with custom itineraries and tailored recommendations.
  • Marriott Bonvoy Gold Elite status (enrollment required).
  • Hilton Honors Gold status (enrollment required).
  • Complimentary membership in the following car rental programs: Avis Preferred Club, Hertz Gold Plus Rewards and National Emerald Club (enrollment required).
  • Car rental loss and damage waiver.
  • Premium Global Assist Hotline access when traveling more than 100 miles from home.
  • Trip delay and trip cancellation insurance.
  • Up to $100 in statement credits annually for purchases at Saks Fifth Avenue (enrollment required).
  • Access to the Platinum Card Concierge.
  • Return protection, purchase protection and extended warranty.
  • Enjoy special access to restaurant reservations and experiences with the Global Dining Collection.
  • Get access to premium seats and select events via the Preferred Seating benefit.
  • Add a complimentary American Express® Gold Card to your account.
  • Terms apply.

To see rates & fees for The Platinum Card® from American Express please click here.

Read our review of The Platinum Card® from American Express.

The Plum Card® from American Express

The Plum Card® from American Express

Apply Now

on American Express's secure site

Terms Apply

Rates & Fees

  • Receive 1.5% discount for paying early*

  • Take up to 60 days to pay with no interest*

  • No foreign transaction fees & no fee for extra employee cards*

Highlights
  • Paying early pays off: get a 1.5% Early Pay Discount, with no cap on what you can earn back.
  • Take up to 60 days to pay with no interest, when you pay your minimum due by the Payment Due Date.
  • Use the power of the Plum Card to buy big for your business.

See additional details for The Plum Card® from American Express

More Info

The Plum Card® from American Express is good for business owners who need flexibility when managing their cash flow, rewarding you with cash back for paying early and up to 60 days to pay your balance without interest, as long as you pay the minimum payment due.

Rewards: Get a 1.5% discount when you pay early, with no cap on what you can earn back.

Welcome offer: None.

Annual fee: $250

Additional benefits:

    • Global Assist Hotline access when traveling more than 100 miles from home.
    • Car rental loss and damage insurance.
    • Take advantage of Amex Offers (enrollment required) for shopping, dining, travel purchases and more.
    • Terms apply.

To see rates & fees for The Plum Card® from American Express please click here.

Read our review of The Plum Card® from American Express.

The information related to American Express® Green Card has been independently collected by CompareCards and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.


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