Charge Card Vs. Credit Card: What’s The Difference? - Forbes

Charge Card Vs. Credit Card: What’s The Difference? - Forbes

Charge Card Vs. Credit Card: What’s The Difference? - Forbes

Posted: 03 Sep 2020 12:00 AM PDT

Editorial Note: Forbes may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations.

They may look identical, but charge cards and credit cards are surprisingly different financial tools. Although both allow you to make a purchase without using cash, there's a big difference when the bill comes. With a credit card, you can carry—or revolve—a balance and pay it off over time, although typically you'll incur interest charges to do so. With a charge card, any balance must be paid in full when the monthly statement arrives.

There are also other distinctions to be aware of. Here's a deeper dive into how each type of card works; it will help you decide which one is a better fit for your particular needs.

Read More: The Forbes Guide to Credit Cards

How Does a Charge Card Work?

Unlike a credit card, a charge card doesn't come with a preset spending limit. This can make it more flexible, since it will grant access to the buying power you need even if that amount fluctuates widely month to month.

This doesn't mean you have unlimited spending ability, though. If you're planning on making a significant purchase, first contact the issuer to see if they'll approve the amount you'd like to charge. Ultimately, a charge card can help you be a more responsible shopper, since you'll know you're on the hook to pay back your debt in the not-so-distant future.

A credit card allows you much more leeway. It may have a firm borrowing limit, but you're only required to make a minimum monthly payment on the total amount you owe. While the idea of smaller payments may be appealing, interest will accrue over time, adding to your overall burden, so it's still in your best interest to pay your card off in full each month.

But for someone who needs extra time to pay down their bill, a credit card could be the better choice. It's possible to avoid interest charges for a period of time by using a card with an introductory 0% APR offer on purchases. These offers generally last from six months to nearly two years. It's almost impossible to find this sort of leniency with a charge card.

How Can I Get a Charge Card?

Although credit cards are available even to those with not-so-great credit, a charge card typically requires a good-to-excellent score. That's because the issuer is taking a bigger risk by assuming you'll pay your full bill every month and not giving you a preset spending limit. If you have poor or limited credit history, you may want to look to a secured card instead.

American Express is the only major issuer that still offers charge cards. The options currently available to consumers include:

Even though these are charge cards, they have a feature called "Pay Over Time" that allows eligible purchases to be treated as they would be on a credit card (up to the Pay Over Time Limit), meaning they don't have to be fully paid off at the end of the billing cycle and are subject to interest charges*.

Aside from American Express, a few retailers (notably gasoline chains) may offer charge cards that can only be used within their brand, although the majority of these allow you to carry a balance.

What Are the Key Differences Between a Charge Card and a Credit Card?

There are six key differences between charge cards and credit cards that you should be aware of.


A credit card requires a minimum payment at the end of each billing cycle, and you can revolve your balance from month to month. A charge card requires payment in full at the end of each month.

Credit Score Required

A credit card can be obtained even with a bad credit score. A charge card requires good-to-excellent credit.


There are plenty of no annual fee credit cards, but charge cards that are currently available carry a yearly cost of ownership (usually substantial; the fees on the American Express charge cards range from $150 to $550, for example).

Credit Utilization

A credit card has a firm spending limit, and the amount of that limit you use (known as credit utilization) is responsible for about 30% of your FICO credit score. Approaching the limit on your card will likely have an adverse impact on your score.

Since a charge card doesn't have a limit, your usage of it won't change your credit utilization.


Some credit cards have rewards programs, some don't. In contrast, all charge cards earn rewards, often at generous rates. The Amex Gold ($250 annual fee – see rates and fees), for example, earns 4 Membership Rewards points per dollar spent at restaurants and U.S. supermarkets*, 3 points per dollar spent on flights booked directly with airlines and provides a welcome bonus of 35,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 3 months. This is on par with a top-tier credit card.


While there are hundreds of credit cards to choose from (each with its own benefits and drawbacks), the pickings are slim with charge cards. The only widely available charge cards are the three offered by American Express.

Should I Get a Credit Card or a Charge Card?

Choosing a credit card or charge card comes down to your own goals and unique financial circumstances. While charge cards have the advantage of preventing you from overspending and amassing debt, there aren't many to choose from, and they have high annual fees.

In contrast, there's a wider array of options when it comes to credit cards (including credit cards for those with bad credit), but it's much easier to rack up debt by revolving a balance. Even so, a credit card, especially one with a 0% APR offer, can be an excellent option for anyone who needs extra time to pay off a big purchase.

In the end, we can't provide a hard-and-fast rule for which type of card you should get. By understanding what you're choosing between, you can take a harder look at your financial situation and the cards currently available to make a better decision for yourself.

To view rates and fees of the American Express® Green Card, please visit this page.

To view rates and fees of the American Express® Gold Card, please visit this page.

To view rates and fees of The Platinum Card® from American Express, please visit this page.

Who Should (and Who Shouldn’t) Get The Amex Business Platinum? - Forbes

Posted: 28 Apr 2020 12:00 AM PDT

Forbes has partnered with The Points Guy for our coverage of credit card products. Forbes and The Points Guy may receive a commission from card issuers. Some of the offers below may no longer be available.

There are few credit cards — for either consumers or small-business owners — that capture the "wow" factor quite like The Business Platinum Card® from American Express.

A welcome bonus potentially worth more than three times the card's annual fee? Check. Exceptional rewards on airfare and prepaid hotel bookings? Check. Massive travel perks, including an annual airline-fee credit and exclusive airport-lounge access? Check again.

It's no wonder this is a must-have card among business travelers, with perks that are all but unmatched by other top business rewards cards. Still, that doesn't mean every small-business owner can justify owning this credit card. It's a great card, but it's not the right card for everyone.

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Key benefits

The Business Platinum card is offering a welcome bonus of 75,000 points after you spend $15,000 on qualifying purchases within the first 3 months of account opening. Based on TPG's most recent monthly valuations, this bonus is worth $1,500.

You'll have to spend $15,000 in the first three months to earn the 75,000-point bonus. That may be a tall order for many small-business owners, but if you have high inventory turnover or are growing your business, this card may help make your normal business activity much more rewarding.

The bonus is far from the only reason to consider this card. In fact, it's the perks that set this card apart, including five not available on The Platinum Card® from American Express:

Just like the personal version of this card, you'll receive an annual up to $200 airline-fee credit, access to Centurion Lounges, Delta Sky Clubs (when flying Delta)Priority Pass lounges (free for you and two guests), along with Airspace lounges. You'll also get up to a $100 Global Entry/TSA PreCheck application credit once every four years, Gold elite status in Hilton HonorsGold elite status with Marriott Bonvoy.

With the Business Platinum, you'll earn 5x points when you purchase airfare or prepaid hotel rooms through Amex Travel, and a pedestrian 1 point per dollar on all other purchases. The one exception is purchases of $5,000 or more, which earn 1.5 points per dollar, up to 1 million extra points per year.

For all of this, you'll pay a $595 annual fee.

Who should get the Amex Business Platinum?

Business travelers (especially overseas): This is a no-brainer, especially with all this card has to offer the global traveler. One perk not mentioned above is this card's lack of foreign transaction fees, meaning you won't get dinged for purchases made outside the U.S.

The business card also offers a few more travel-related perks than the personal version, although you'll be missing out on up to $200 in annual Uber credits and the 5x points on airfare purchased directly from an airline if you opt for the business version. Still, the 5x points on airfare and hotels booked via Amex Travel can prove extremely rewarding, as Membership Rewards points are worth 2 cents apiece, according to TPG's valuations.

Businesses with big general expenses: Although you can find business credit cards that offer better rewards on bonus categories such as office supplies and internet expenses, most cards offer 1 point per dollar on everyday spending. But if your business routinely makes large purchases of $5,000 or more, the 1.5 points per dollar bonus on big purchases with the Business Platinum is better than you might find elsewhere.

And if your business makes thousands of dollars in credit card purchases monthly, that huge spend on the welcome bonus won't seem daunting. In fact, in that case there shouldn't be much debate about whether to apply for this card with the current bonus offer.

Owners who value transfer partners: The most lucrative way to redeem Membership Rewards points is to transfer them to one of Amex's 19 partner airlines or three hotels. If you're willing to put in the time and research, going the transfer route can increase the value of your points even above our valuations.

For example, The Points Guy himself transferred 68,000 points to British Airways to fly first class from London (LHR) to Accra (ACC) plus $462 in taxes/fees — a flight that would have cost him more than $11,669 to buy. That redemption netted 16 cents a point.

Someone who has the American Express® Business Gold Card: This could provide a one-two punch when it comes to earning Membership Rewards. Use the Business Gold Amex to fill in the blanks left by the Business Platinum card. With the Business Gold, you'll earn 4x Membership Rewards points on the two categories in which you spend the most each month from the following list:

  • Airfare purchased from airlines
  • U.S. purchases for advertising in select media
  • U.S. purchases for shipping
  • U.S. purchases at gas stations
  • U.S. purchases at restaurants
  • U.S. purchases made from select technology providers

While you're capped at $150,000 a year for this 4x earning (then 1x), that 8% return is pretty sweet and Amex will even recalculate your top spending categories each month, to make sure you earn the maximum number of points possible.

Who shouldn't get the Amex Business Platinum?

Businesses with spending needs that don't revolve around travel: This card has little value if you're not regularly catching planes or spending the night in a hotel. You're also wasting earning opportunities if you spend a good deal of money on office supplies, internet service or advertising. There are other, better options for you, including the Ink Business Cash Credit Card. The information for the Ink Business Cash has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Owners with more modest business expenses: If you don't average roughly $8,300 a month in business spending, this card may not be worth it to you, or at least not with its current limited-time elevated bonus. That's about the amount of spending it will take to qualify for the full welcome bonus.

Someone who already has the personal version of the card: Since there are so many similarities between the business and personal versions of this card, it might be hard to justify having both. First, you'll need to figure out if you can spend enough to earn both bonuses. Then you'll want to consider whether you'll use the 1.5x points per dollar on purchases of at least $5,000. Outside of the bonus, another key consideration in whether or not to get the business version is keeping your personal and business expenses separate, and whether or not you can stomach paying more than $1,000 in annual fees for your Platinum cards.

Businesses that need many employee cards: Although you can get up to 99 Platinum employee cards, Amex says it will charge you $199 annually for each additional Business Platinum card you request, and $50 annually if you request Amex Business Gold cards for your employees to use. That's a pretty hefty price to pay, particularly when there are other business-card options that offer free employee cards, like the Capital One® Spark® Cash for Business. The information for the Capital One Spark Cash has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Bottom line

TPG considers The Business Platinum Card from American Express to be one of the best business credit cards with good reason — it has fantastic value for the heavy business traveler and it's currently offering one of the most valuable limited-time welcome bonuses on the market.

If you're able to meet the hefty spending requirement, you probably shouldn't need much more convincing to get this card. On the other hand, it's a much more dicey proposition (alright, probably a bad idea) for a business owner who sticks to the ground — particularly when there are so many great options out there to earn points, miles and cash back on the business expenses that matter most to you.

Editorial Disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.


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