Charge cards vs credit cards
People often make the mistake of thinking that credit cards and charge cards are the same thing, when they’re actually quite different. A credit card offers a fixed credit limit, which cannot be exceeded unless the limit is extended, and interest is applied, typically over 44 days until your balance is cleared. On the other hand, a charge card has no fixed credit limit but is based on your spending patterns, but the balance must be paid in full by the due date of each monthly bill. If you still have an outstanding amount after this period, a fee is charged, which is usually a percentage of the remaining balance.
If you’re trying to decide which one to go for, you should consider which type of card best matches your spending needs and your lifestyle. credit card are useful for deferring payment on relatively small items, and then reducing the balance over time. If you need to buy a new household appliance or piece of furniture, and want to pay it off over a period of time a credit card may be a good option. However, if you need to make a bigger purchase – a new car for example – it’s unlikely that your credit limit will cover it, whereas Charge cards have the benefit of having no set pre spending limit.
Charge cards are a smarter way to manage your finances. No preset spending limit means you’re free to spend as much as you can afford to repay, while you will avoid interest payments, as the card is paid off in full each month.
On the other hand, if you need to spread payments over time occasionally, then a credit card may be more suitable for you.
American Express Platinum card members can stay in control of their finances and have no pre set spending limit while enjoying the benefits of having a charge card in the way of earning membership rewards points.
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