If you have excellent credit rating and you can pay your balances in full, you may want to look at your charge credit card options. Simply known as charge cards, these are perfect for people who need to spend a lot but do not fail to pay the monthly fees. Although charge cards and credit cards are commonly used interchangeably, there are a few differences particularly in the financial transaction protocols.
Charge vs. Credit Cards
Both credit and charge cards let you pay your purchases using your available credits. They both have similar appearances - small, lightweight, and portable rectangular plastics. However, there are a few distinctions that will immediately tell a consumer that he is holding either a credit or a charge card.
A charge card does not have a spending limit. You can use it for purchases no matter what their costs, provided that you can pay off your balances in full each month. It is not advised that you miss a payment schedule and that you pay below your required fees. This can result to extremely high charges, or worse, an account termination. This type of card can be difficult to obtain because only those with excellent credit can qualify. In addition, both spending and payment histories will be taken into consideration.
Unlike a charge credit card, a regular credit card has a set spending limit. There are also interest rates and minimum payments. Interest rates are imposed on accounts that fail to pay their balances in full. Minimum payments are applied to all accounts. If you do not pay on time and you do not pay at least the minimum payment, your account will not be closed. However, there is an agreed interest rate which will be added on top of your outstanding balance.
Should You Get a Charge Card?
Charge credit cards firmly require every card holder to pay their balances in full each month. The steep penalties will surely set you back if you are planning not to repay your balances for the current month. Such regulation enforces trustworthiness in both spending and repayment. Aside from that, it provides help in avoiding fees that may remain in your account for a long period of time. These may include high interest rates that keep growing as well as long standing balances on credit and overdraft fees.
The most important reason why a charge card can be a great financial tool for you is because it helps you establish good credit. Since these cards encourage you to pay all your balances, they cannot hurt your credit score. All your good repayment habits will be reflected on your credit report. You also do not have to worry about expensive debts since there are no interest rates which grow each month.
There are also charge cards that come with great rewards and exclusive perks for card holders. Bear in mind that those that have rewards usually have high annual fees. So if you want a card that lets you spend without restrictions and gives you a chance to build your credit history, you should definitely get a charge credit card.
Charge vs. Credit Cards
Both credit and charge cards let you pay your purchases using your available credits. They both have similar appearances - small, lightweight, and portable rectangular plastics. However, there are a few distinctions that will immediately tell a consumer that he is holding either a credit or a charge card.
A charge card does not have a spending limit. You can use it for purchases no matter what their costs, provided that you can pay off your balances in full each month. It is not advised that you miss a payment schedule and that you pay below your required fees. This can result to extremely high charges, or worse, an account termination. This type of card can be difficult to obtain because only those with excellent credit can qualify. In addition, both spending and payment histories will be taken into consideration.
Unlike a charge credit card, a regular credit card has a set spending limit. There are also interest rates and minimum payments. Interest rates are imposed on accounts that fail to pay their balances in full. Minimum payments are applied to all accounts. If you do not pay on time and you do not pay at least the minimum payment, your account will not be closed. However, there is an agreed interest rate which will be added on top of your outstanding balance.
Should You Get a Charge Card?
Charge credit cards firmly require every card holder to pay their balances in full each month. The steep penalties will surely set you back if you are planning not to repay your balances for the current month. Such regulation enforces trustworthiness in both spending and repayment. Aside from that, it provides help in avoiding fees that may remain in your account for a long period of time. These may include high interest rates that keep growing as well as long standing balances on credit and overdraft fees.
The most important reason why a charge card can be a great financial tool for you is because it helps you establish good credit. Since these cards encourage you to pay all your balances, they cannot hurt your credit score. All your good repayment habits will be reflected on your credit report. You also do not have to worry about expensive debts since there are no interest rates which grow each month.
There are also charge cards that come with great rewards and exclusive perks for card holders. Bear in mind that those that have rewards usually have high annual fees. So if you want a card that lets you spend without restrictions and gives you a chance to build your credit history, you should definitely get a charge credit card.