What does Charge card mean?
A charge card is a type of payment card which requires the user to fully pay the charge in full each billing period, by the date inscribed on the statement. Charge cards differ from regular credit cards, which enable clients to use a revolving line of credit. This kind of credit can be paid down over a set period of time and can be accessed at any time. The balance on charge cards is not allowed to be carried to the next billing period.
This card typically charges no interest and requires the consumer to pay his or her balance fully upon receiving the billing statement in the specific month. There are some similarities between the charge card and the credit card, but the main difference and a major benefit is that the spending limit of the charge card is much higher, it can even be unlimited.
Among other things the costs related to a charge card are: a set fee for the charge card itself, and huge penalties on balances that were left unpaid. Some examples of charge cards would be Diner’s Club and American Express.