Edited by Samuel MountjoyWhat Is the Difference Between Charge Cards and Credit Cards?
Edited by Samuel Mountjoy
Quick Answer
The biggest difference between charge cards and credit cards is that charge cards require you to pay your monthly bill in full. If you don’t pay a charge card in full, you’ll be subject to fees and interest. Charge cards also don’t have traditional credit limits.
A charge card requires you to pay your balance in full each month to avoid paying a fee, in addition to interest on the unpaid balance. A traditional credit card, however, allows you to carry over a portion of your balance as long as you make the minimum payment each month as set by the credit card issuer.
Below are the key differences between charge cards and credit cards.
| Charge Card | Credit Card | |
|---|---|---|
| Required monthly payment | Full balance, unless you sign up to pay off a purchase in installments if available from the issuer | Minimum payment as calculated by the issuer; typically 1% to 4% of your balance or a flat $25 or $35 |
| Availability | Limited options from only a few issuers | Wide variety of credit cards available from a range of issuers |
| Acceptance rates | Generally accepted anywhere you can pay with a credit card | Broadly accepted as a method of payment |
| Interest charges | Do not accrue, since you must pay off the full balance each month; failing to pay in full can lead to penalties or usage restrictions, plus interest charges | Accrue when you don't pay the full statement balance each month |
| Rewards | High-value rewards programs available | May be available in the form of cash back, travel miles or points, depending on the card |
| Credit limit | No predetermined spending limit | Credit limit determined by issuer based on your credit history, income and other factors |
What Is a Charge Card?
A charge card is a type of credit card with no predetermined credit limit, meaning you can spend as much as you want. However, you must pay off the balance by your due date to avoid penalties. Interest won't accrue as it would with a traditional credit card, unless you opt in to a specific pay-over-time or installment plan offering as outlined by your credit card issuer. Charge cards are hard to find, but American Express offers several cards with no preset spending limit that have features typical of charge cards.
Pros and Cons of Charge Cards
Charge cards are a unique financial tool, and they're worth considering as long as you understand their benefits and downsides.
Pros
-
Built-in encouragement to avoid debt: Charge cards add an extra motivation to use credit responsibly by charging both interest and additional fees if you carry a balance. While it's best to pay off the balance on your traditional credit cards each month, you won't be penalized—beyond paying interest charges—if you don't.
-
Rewards: Charge cards may come with valuable rewards, such as points you can accrue on eligible purchases or credits toward restaurants or taxi services, for example.
-
No firm spending limit: Charge cards don't give you a specified credit limit when you're approved, though you won't be able to spend an unlimited amount. The spending power you're granted may change based on your card usage and credit history, and you can check your current limit on your account portal or in the issuer's app.
Cons
-
Less flexibility: There might be times when you would prefer to pay off a big purchase in installments. Carrying a balance can be more expensive on a charge card, though check the issuer's policies to see if it has an installment plan option and how much it will cost.
-
Requires careful tracking of spending: Since you'll need to pay off your entire balance monthly, it's crucial to monitor spending and ensure you can pay the full bill when it comes due. Even if it's possible to opt in to a pay-over-time feature, you'll have to understand the issuer's rules and ensure you meet all requirements to avoid penalties.
-
Fewer fee-free card options: Many traditional credit cards don't have annual fees. Charge cards, however, typically do charge annual fees. Their rewards can be stellar, but you'll need to make sure that you use the card enough to rationalize paying the fee.
What Is a Credit Card?
A credit card is a type of revolving credit that lets you charge up to a certain credit limit and pay off purchases over time. You'll then pay interest on the portion of the balance you carry. There is a wide variety of credit cards out there, from those that offer cash back or travel rewards to secured credit cards that help you establish or rebuild credit.
Best credit cards of 2026
Compare cards from our partners with intro bonuses, cash back or points offers, and annual fees as low as $0.
Offers from our partners
Blue Cash Everyday® Card from American Express
Intro bonus:You may be eligible for as high as $200 cash back after spending $2,000 in purchases on your new Card in the first 6 months. Welcome offers vary and you may not be eligible for an offer. Cash back is received as Reward Dollars, redeemable for statement credit or at Amazon.com checkout. Terms Apply.
Intro APR:0% on Purchases and Balance Transfers for 15 months
Ongoing APR:19.49%-28.49% Variable
Rewards:1% - 3% (cash back)
Annual Fee:$0
Wells Fargo Reflect® Card
Intro APR:0% intro APR for 21 months from account opening on purchases and qualifying balance transfers
Ongoing APR:17.49%, 23.99%, or 28.24% Variable APR
Rewards:N/A*
Annual Fee:$0
Discover it® Chrome
Intro bonus:INTRO OFFER: Unlimited Cashback Match for all new cardmembers. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards.
Intro APR:0% intro APR for 6 Months on Purchases and 0% intro APR for 18 Months on Balance Transfers
Ongoing APR:17.49% - 26.49% Variable APR
Rewards:1% - 2% (cash back)
Annual Fee:$0
Revel® Platinum Mastercard®
Ongoing APR:35.90% Fixed
Rewards:N/A*
Annual Fee:$75 - $125
Citi® Diamond Preferred® Card
Intro APR:0% for 21 months on Balance Transfers and 12 months on Purchases
Ongoing APR:16.49% - 27.24% (Variable)
Rewards:N/A*
Annual Fee:$0
FIT™ Platinum Mastercard® - $400 Credit Limit
Ongoing APR:35.90% Fixed
Rewards:N/A*
Annual Fee:$99 first year; $125 thereafter
The opensky® Secured Visa® Credit Card
Ongoing APR:23.89% Variable
Rewards:10% (cash back)
Annual Fee:$35
Credit One Bank American Express® Card for Rebuilding Credit
Ongoing APR:29.74% Variable
Rewards:1% (cash back)
Annual Fee:$75 First year. $99 thereafter, billed monthly at $8.25
Blue Cash Preferred® Card from American Express
Intro bonus:You may be eligible for as high as $300 cash back after spending $3,000 in purchases on your new Card in the first 6 months. Welcome offers vary and you may not be eligible for an offer. Cash back is received as Reward Dollars, redeemable for statement credit or at Amazon.com checkout. Terms Apply.
Intro APR:0% on Purchases and Balance Transfers for 12 months
Ongoing APR:19.49%-28.49% Variable
Rewards:1% - 6% (cash back)
Annual Fee:$0 intro annual fee for the first year, then $95.
American Airlines AAdvantage® MileUp® Card
Intro APR:0% for 15 months on Balance Transfers
Ongoing APR:19.49% - 29.49% (Variable)
Rewards:2x (Miles per dollar)
Annual Fee:$0
Costco Anywhere Visa® Card by Citi
Ongoing APR:18.74% - 26.74% (Variable)
Rewards:1% - 5% (cash back)
Annual Fee:$0
American Express® Gold Card
Intro bonus:You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.
Ongoing APR:See Pay Over Time APR
Rewards:1x - 4x (Points per dollar)
Annual Fee:$325
First Latitude Secured Mastercard® Cash Back Rewards
Ongoing APR:27.49% Variable
Rewards:1% - 10% (cash back)
Annual Fee:$0
Citi® / AAdvantage® Platinum Select® World Elite Mastercard®
Ongoing APR:19.49% - 29.49% (Variable)
Rewards:2x (Miles per dollar)
Annual Fee:$99, waived for first 12 months
Avant® Cashback Rewards Mastercard®
Ongoing APR:35.99%*
Rewards:1% (cash back)
Annual Fee:$75*
Citi® / AAdvantage® Globe™ Mastercard®
Ongoing APR:19.49% - 29.49% (Variable)
Rewards:1x - 6x (Miles per dollar)
Annual Fee:$350
Avant® Cashback Rewards Mastercard®
Ongoing APR:35.99%*
Rewards:1% (cash back)
Annual Fee:Introductory fee of $75 for the first year. After that, $99 annually.*
Avant® Cashback Rewards Mastercard®
Ongoing APR:35.99%*
Rewards:1% (cash back)
Annual Fee:$39*
Credit One Bank® Platinum X5 Visa® Metal Card
Ongoing APR:29.74% Variable
Rewards:1% - 5% (cash back)
Annual Fee:$95
First Progress Prestige Secured Mastercard® Cash Back Rewards
Ongoing APR:13.49% Variable
Rewards:1% - 10% (cash back)
Annual Fee:$49
First Progress Select Secured Mastercard® Cash Back Rewards
Ongoing APR:17.49% Variable
Rewards:1% - 10% (cash back)
Annual Fee:$39
Credit One Bank® Premier American Express® Credit Card
Ongoing APR:29.74% Variable
Rewards:1% (cash back)
Annual Fee:$39
Marriott Bonvoy Brilliant® American Express® Card
Intro bonus:Earn 200,000 Marriott Bonvoy® bonus points after you use your new Card to make $6,000 in purchases within the first 6 months of Card Membership. Offer Ends 5/13/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:2x - 6x (Points per dollar)
Annual Fee:$650
Discover it® Miles
Intro bonus:UNLIMITED BONUS: Unlimited Mile-for-Mile match for all new cardmembers. Discover gives you an unlimited match of all the Miles you’ve earned at the end of your first year. There’s no signing up, no minimum spending or maximum rewards. Just a Miles-for-Miles match. You could turn 35,000 Miles into 70,000 Miles.
Intro APR:0% intro APR for 15 months on Purchases and Balance Transfers
Ongoing APR:17.49% - 26.49% Variable APR
Rewards:1.5x (Miles per dollar)
Annual Fee:$0
Delta SkyMiles® Gold American Express Card
Intro bonus:Earn 70,000 Bonus Miles after you spend $3,000 in purchases with your new Card, and an additional 20,000 bonus miles after you make an additional $2,000 in purchases on the Card, both within your first 6 months. Ends 04/01/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:1x - 2x (Miles per dollar)
Annual Fee:$0 introductory annual fee for the first year, then $150.
Hilton Honors American Express Surpass® Card
Intro bonus:Earn 130,000 Bonus Points plus a Free Night Reward after you spend $3,000 in purchases on the Card in the first 6 months of Card Membership. Offer Ends 4/15/2026.
Ongoing APR:19.49%-28.49% Variable
Rewards:3x - 12x (Points per dollar)
Annual Fee:$150
Delta SkyMiles® Blue American Express Card
Intro bonus:Earn 10,000 bonus miles after you spend $1,000 in purchases on your new Card in your first 6 months.
Ongoing APR:19.49%-28.49% Variable
Rewards:1x - 2x (Miles per dollar)
Annual Fee:$0
One Key+™ Card
Intro bonus:Earn $350 in OneKeyCash™ after you spend $3,000 on purchases in the first 3 months. OneKeyCash is not redeemable for cash and can only be used on Expedia®, Hotels.com® and Vrbo®. To learn more, please refer to the One Key Terms and Conditions at www.expedia.com/one-key-terms.
Ongoing APR:18.49%, 23.49%, or 28.49% Variable APR
Rewards:2x - 3x (Points per dollar)
Annual Fee:$99
Avant® Cashback Rewards Mastercard® - With A Higher Credit Limit
Ongoing APR:35.99%*
Rewards:1% (cash back)
Annual Fee:$125*
Avant® Cashback Rewards Mastercard®
Ongoing APR:35.99%*
Rewards:1% (cash back)
Annual Fee:$0*
See all our best credit cards for 2026.
Pros and Cons of Credit Cards
Using credit cards is a powerful way to build your credit and to flexibly make purchases while also potentially earning rewards. But they can also lead to debt if not used intentionally. Here are the pros and cons to take into account.
Pros
-
Option to carry a balance: Credit cards give you the ability to carry a balance to the next month without opting in to special programs, paying extra fees or experiencing other penalties. You'll have to stick to a minimum required monthly payment, which is either a fixed amount or a percentage of your balance.
-
Huge array of no-fee options: There are many credit card issuers that offer a range of card types, many of which come with no annual fee. You can also choose a specific credit card that suits your goals, such as a balance transfer credit card if you want to pay off a balance at a promotional 0% annual percentage rate (APR) or a student credit card if you're a college student starting out with credit.
-
Various ways to earn rewards: Traditional credit cards come in many different varieties, including rewards cards targeted at frequent travelers, foodies and those who spend mostly on gas and groceries. You can opt for a rewards card that lets you earn points, miles or cash back in categories where you already spend regularly.
Cons
-
Potential for debt: Despite the fact that credit cards come with a more fixed credit limit than charge cards, the ability to easily carry over a balance from month to month can lead to debt. That can have a negative impact on your credit score. Plus, paying only the minimum payment each month means it's easy to avoid making progress on your debt.
-
Less flexible credit limit: The credit card issuer will assign you a credit limit when you're approved for the card, and it'll be based on your credit history and other financial factors. It's possible to request an increase to your credit limit, but charge cards may offer more freedom to make bigger purchases.
-
High interest rates: There's no limit on credit card APRs, but the average rate charged in the U.S. is 22.83% as of August 2025, according to the Federal Reserve. Interest rates can vary greatly, however, with some cards charging an APR in excess of 30%. That means carrying a balance will mean accruing significant interest. Paying off the full balance of a credit card each month will prevent you from paying any interest at all.
Key Differences Between Charge Cards and Credit Cards
Both charge cards and credit cards let you buy items that you might not be able to pay for right away with cash. But there are several major differences between the card types.
- Monthly payment required: Charge cards require you to pay your full balance each month. If you don't, you could be subject to fees and interest charges. Traditional credit cards also charge interest if you carry a balance, but you'll only have to pay a late fee if you make your payment after the due date. Credit cards come with a minimum monthly payment due that can be much lower than your total balance.
- Availability: Charge cards are becoming more of a rarity. Many issuers offer traditional credit cards, and there is more variety in the types of rewards and fee structures available.
- Acceptance rates: Traditional credit cards are a safe bet as a payment method if they're in the Visa or Mastercard network. Traditionally, American Express wasn't as widely accepted, but the company says customers can now use their cards at 99% of vendors that allow payment by credit card in the U.S. While American Express still is not accepted as broadly as Visa and Mastercard internationally, acceptance rates are increasing.
- Interest charges: Since you're expected to pay off your balance each month, charge cards don't accrue interest charges or fees if you use them as designed. Credit cards charge interest if you carry a balance.
How Do Charge Cards Affect Your Credit Score?
With traditional credit cards, your credit limit and how it compares with your credit card balance is factored into your credit score via your credit utilization rate. If you use up a substantial portion of your credit limit, your credit utilization will be high and your score can be negatively affected. Charge cards don't have credit limits, however, and are generally considered open credit accounts as opposed to revolving credit accounts. Therefore, credit scoring models generally won't count your charge card balance toward your credit utilization.
In practice, this means charge card balances may not be as much of a factor in your credit score calculations. So as a responsible charge card user, you could get the credit score benefits of making on-time payments without the drawbacks of a balance added to your credit report.
Where Can I Get a Charge Card?
The number of charge card options is relatively limited. The major credit card issuer that offers the most charge cards for both individuals and businesses is American Express.
Businesses that operate fleets of company vehicles can also apply for gas cards that work like charge cards: You'll pay for gas for your business's fleet with the card—usually at specific locations associated with the card issuer—then pay the balance in full each month. Fleet card issuers include WEX, Fuelman, Shell and others.
Should I Get a Charge Card or a Credit Card?
To decide whether to get a charge card or a credit card, consider your personal spending patterns, budget and goals.
When to Consider Getting a Charge Card
A charge card may be for you if:
- You're committed to paying your full balance each month. If your budget allows for a charge card, meaning you have the flexibility to cover your full balance every time your bill is due, you can take advantage of the impressive rewards and credit score benefits available.
- You can afford an annual fee. Charge cards often come with annual fees, which can cost several hundred dollars. Make sure you will use the card enough to justify the fee.
- You want flexible spending limits. Perhaps you foresee making large purchases, or you want your credit limit to be dynamic without having to request a larger one. Charge cards provide spending limits that are a closer match with your current card usage rather than your credit history only.
When to Consider Getting a Credit Card
A credit card, however, is likely a better choice when:
- You regularly carry a balance. Credit cards are more amenable to situations when you can't or don't want to pay off your full balance, since you won't have to pay extra fees or register for a particular program to do so.
- You're building or improving your credit score. There are credit cards available for those who are focused on establishing or improving credit, like secured cards. You may not qualify for premium charge cards if you don't have good or excellent credit. And using a charge card properly won't have as positive an impact on your credit score as using a credit card would.
- You want a card with no fees. Since there are so many credit cards out there, you're likely to find one with no or low fees that is also geared toward your credit profile.
The Bottom Line
Charge cards are less prevalent than credit cards. But they may be a good choice for those who want a flexible credit limit and valuable rewards—and who can afford an annual fee and the requirement to pay their monthly bill in full. Credit cards are a solid option, however, since they're more widely available and come with a number of benefits. The choice comes down to how you plan to use the card, and what your current budget has the room for.
Don’t apply blindly
Apply for credit cards confidently with personalized offers based on your credit profile. Get started with your FICO® Score for free.
See your offers
About the author
Brianna McGurran
Brianna McGurran is a freelance journalist and writing teacher based in Brooklyn, New York. Most recently, she was a staff writer and spokesperson at the personal finance website NerdWallet, where she wrote "Ask Brianna," a financial advice column syndicated by the Associated Press.
Read more from Brianna