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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

You could say that charge cards, such as the Diners Club card by Discover in 1950, gave birth to the credit card. Today, however, only American Express continues to issue consumer and business charge cards in the United States, though not all Amex cards are charge cards. There is also the Brex for Startups charge card, which is marketed to well-funded entrepreneurs.

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.

The exception is if you take advantage of Amex’s Pay Over Time feature on its charge cards, 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 charge card is essentially functioning like a credit card.

Do charge cards have spending limits?

With a credit card, 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. Charge cards, by contrast, have no preset spending limit.

This does not mean you’ll be able to spend an unlimited amount with a charge card, 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 may change over time.

Will a charge card help you 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 charge 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

Unlike typical credit cards, these American Express cards allow you to carry a balance for certain charges — but not all, while the Brex For Startups requires you to pay your balance in full each month.

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 with free two-day shipping on eligible items.
  • Exclusive access to events such as Broadway shows, concerts and sporting events.
  • Terms apply.

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

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

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

  • Up to $100 per year for incidentals*

Highlights
  • 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 on Restaurants worldwide, including takeout and delivery.
  • 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 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.

See additional details for American Express® Gold Card

More Info

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

Rewards: Earn 4X Membership Rewards® Points on Restaurants worldwide, including takeout and delivery. Additionally, 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.

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.
  • 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.
  • Exclusive access to events such as Broadway shows, concerts and sporting events.
  • Take advantage of Amex Offers for shopping, dining, travel purchases and more.
  • 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

  • 75,000 Membership Rewards® Points after you use your new Card to make $5,000 in purchases in your first 6 months. *

  • Enjoy Uber VIP status and up to $200 in Uber savings on rides or eats orders in the US annually.*

  • No foreign transaction fees & exclusive airport lounge access*

Highlights
  • Earn 75,000 Membership Rewards® Points after you spend $5,000 on purchases on your new Card in your first 6 months of Card Membership.
  • Earn 10x points on eligible purchases on your new Card at U.S. Gas Stations and U.S. Supermarkets, on up to $15,000 in combined purchases, during your first 6 months of Card Membership. That’s an additional 9 points on top of the 1 point you earn for these purchases.
  • 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 and Additional Centurion Cards only.
  • Earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel. Starting January 1, 2021, earn 5X points on up to $500,000 on these purchases per calendar year.
  • 5X Membership Rewards® Points on prepaid hotels booked on amextravel.com.
  • Enjoy complimentary access to the Global Lounge Collection, the only credit card airport lounge access program that includes proprietary lounge locations around the world.
  • Receive complimentary benefits through American Express Travel with an average total value of $550 with Fine Hotels & Resorts® program at over 1,100 properties . Learn More.
  • Get up to $100 in statement credits annually for purchases at Saks Fifth Avenue on your Platinum Card®. That’s up to $50 in statement credits semi-annually. Enrollment required.
  • $550 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 and 5X Membership Rewards® points on prepaid hotels booked on amextravel.com.

Welcome offer: 75,000 Membership Rewards® Points after you use your new Card to make $5,000 in purchases in your first 6 months.

Annual fee: $550

Additional benefits:

  • Access to more than 1,200 airport lounges via the Global Lounge Collection.
  • Annual credit of up to $200 for incidental airline fees.
  • 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.
  • Hilton Honors Gold status.
  • Complimentary membership in the following car rental programs: Avis Preferred Club, Hertz Gold Plus Rewards and National Emerald Club.
  • 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.
  • 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 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: $0 introductory annual fee your first year, then $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 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.

Brex For Startups

The Brex For Startups made its debut in 2019 for entrepreneurs who might have trouble accessing credit from traditional sources. Note that it’s a corporate card, meaning that it doesn’t require a personal credit guarantee — but its requirement that you must have at least $50,000 in a U.S. bank account to qualify could make it difficult for some business owners to qualify. Also, know that this card is not issued by American Express.

Rewards: Earn points on every dollar spent with industry-leading multipliers: 7x on rideshare, 4x on travel, 3x on restaurants, 2x on software subscriptions and 1x on all other transactions.

Welcome offer: None.

Annual fee: $0

Additional benefits:

  • Get discounts on business-related services from Brex’s partners, such as Amazon Web Services, Slack and more. Brex estimates these offers are worth $50,000 in value.

Read our review of the Brex For Startups.

Is a charge card right for you?

When evaluating whether a charge card or a credit card better fits your spending habits, consider the following questions:

  • Are you willing to pay an annual fee?
  • Do you have good or excellent credit?
  • Are you able to pay your card in full each month?
  • What kind of rewards are you looking for?
  • Where do you intend to use the card?

You’ll likely have to pay an annual fee for a charge card, whereas there are many no-annual-fee credit cards. And applicants generally need good or excellent credit scores to qualify for a charge card. People with no credit or bad credit should look at credit cards designed for building credit.

Having the ability to revolve a balance from time to time can come in handy when finances are tight, but with a charge card, that can become a little tricky as generally, the entire balance is due in full when the statement arrives. But that can be a good thing, too, as paying in full every month can prevent you or your business from racking up debt.

As to rewards, charge cards typically offer strong rewards and benefits. But just make sure they fit with your spending habits. For example, if you’re a heavy spender on gas, a credit card such as the Wells Fargo Propel American Express® card or the Bank of America® Cash Rewards credit card would be a better fit than any of the charge cards listed here.

Finally, bear in mind that American Express is the main issuer of charge cards. While Amex has worked hard to catch up to Visa and Mastercard as far as acceptance at merchants in the United States, there are still some destinations abroad where it’s not so widely accepted. For this reason, it may be wise to carry a Visa or Mastercard as a backup when traveling internationally.

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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