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Charge Cards

Charge cards help prevent you from accruing costly interest charges. With a charge card, your total balance on your card account is due in full at the end of every billing cycle.

AMEX Gold vs Platinum

The differences between the Gold Card and the Platinum Card are more stark than just metallic colors. Read this in-depth comparison to decide which card from American Express, a CreditDonkey partner, is right for you.


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Introductory Bonus OfferPoint RewardsNo Limits on RewardsNo Pre-Set Spending LimitCar Rental InsuranceExtended WarrantyPurchase ProtectionBaggage Insurance
Our Review: The Business Green Rewards Card from American Express gives you a way to flexibly manage your business expenses while earning reward points. But is it worth it? Read this review to compare... Read full review
Card TypeAnnual Fee
Business Charge Card
$0 introductory annual fee for the first year, then $95


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Introductory Bonus OfferTravel RewardsAirline RewardsBonus Airline RewardsHotel RewardsPoint RewardsNo Limits on RewardsNo Pre-Set Spending LimitConcierge Car Rental InsuranceExtended WarrantyPurchase ProtectionReturn ProtectionBaggage Insurance$0 Fraud LiabilityEmergency Card ReplacementIdentity Theft AssistanceRoadside Assistance
Our Review: The Business Platinum Card® from American Express offers travel-friendly benefits, including Global Lounge Collection, Airline Fee Credit, and Platinum Concierge Service. But is it worth it? Read on to learn the pros and cons... Read full review
Card TypeAnnual Fee
Business Charge Card
$595


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No Pre-Set Spending LimitCar Rental InsuranceExtended WarrantyPurchase ProtectionReturn ProtectionBaggage Insurance$0 Fraud LiabilityIdentity Theft AssistanceRoadside Assistance
Our Review: Is the Plum Card® from American Express worth it? Read on to see how this card can help business owners manage cash flow... Read full review
Card TypeAnnual Fee
Business Charge Card
$0 introductory annual fee for the first year, then $250

Disclaimer: The information for the Business Green Rewards Card from American Express, The Business Platinum Card® from American Express, and The Plum Card® from American Express has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.


Charge Benefits

Benefits: Using a Charge Card

While charge cards share some similarities with credit and debit cards, they also have some unique benefits:

  • No Interest Charges: Your balance is generally due in full at the end of each month. This helps lessens the risk of accumulating interest on debt, so the purchases you make won’t end up costing more than you originally paid for them as long as you pay in full.

  • Flexible Spending Limits: Higher spending limits can be a useful feature, especially for business owners. Charge cards provide them with easy, short-term financing for large purchases of equipment or inventory.

  • Prestige: It’s a superficial benefit but not an insignificant one. Charge cards are a well-respected form of plastic, and they are usually available only for people with excellent credit histories. For both business owners and individuals, using a charge card can signal a level of financial or business success, plus credibility.

Drawbacks

Charge cards are not without disadvantages, especially compared to credit and debit cards:

  • Less Flexibility: Sometimes it’s useful to have the option of taking an extra month or two to pay your balance. However, failing to pay your charge card balance in full at the end of each month can result in late fees and an inability to continue using your card until the debt is paid. This can be especially problematic for business owners: An unexpected expense combined with late customer payments can result in cash flow issues and an inability to pay when the bill arrives.

  • Discipline Required: Having a charge card means being disciplined enough to set up and stick to a budget. They require more discipline than credit cards, which let you carry over a balance, or debit cards, which won’t let you spend more money than you have in the first place. You have to know what your personal spending limits are and stay within them.

  • Impact on Credit Score: One of the factors in calculating your credit score is credit utilization, or the amount of debt you have compared to the maximum amount you can borrow. Lower percentages are better for your score. Charge cards can make your debt utilization look a lot higher than it actually is because they have no set credit limit. Without a credit limit, some scoring models substitute your highest balance to represent the most you can borrow. So if the most you ever spent with your card in a month is $5,000 and you have a balance of $3,000 in a given month, your debt utilization is 60%. On a credit card with a set limit of $10,000, your debt utilization would be just 30%. Fortunately, this scoring anomaly would be a bigger problem for people with short or poor credit histories, but they are less likely to be approved for a charge card in the first place.

Charge cards come with a very specific set of rules and requirements, so make sure you know what you’re getting into before you apply for one. Start by comparing charge cards to more traditional alternatives like credit and debit cards to determine which option is the best fit for you. The annual fees attached to charge cards are not insignificant, so be sure that the card you choose will both suit your financial needs and pay for itself through the rewards and other perks it offers.


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About CreditDonkey®
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Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.

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