What is the Difference Between a Charge Card and a Credit Card?

Charge cards are very similar to credit cards except they require cardholders to pay off balances each month.  Charge cards are often issued by American Express.  There are no interest rates nor do they come with any defined spending limit.

Charge cards typically require a good credit rating and typically require the payment of annual fees from $99 - $500.  However, these cards typically come with a solid offering of services for card holders.  Purchase protection may cover the damage of theft of items purchased with a charge card within the last 90 days, for example.

Credit bureaus record the use of a charge card in the same manner that they track standard credit card payment history.  Keep your charge card spending in check, and your payments current to ensure that your credit score is not affected by your charge card use.