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20 December 2023

Difference between Charge card and Credit card

Both credit cards and charge cards are electronic payment methods that depend on borrowed funds to boost your credit score. So let us check it out the difference between a charge card and a credit card to better understand this topic.

What is a Credit Card?

A credit card allows users to make purchases and make repayments, much like a charge card does. Credit cards as opposed to charge cards, have individual spending limits. The cardholder can carry a balance from month to month even if they are supposed to make monthly payments. 

What is a Charge Card?

One type of card used for purchases is a charge card. Similar to credit cards, certain charge cards offer point systems and rewards. However, a charge card differs slightly from a credit card in terms of how it is paid for, how much it can be charged, and how it affects your credit.

The Difference between a Charge card and a Credit card 


With a credit card, you may change your balance from month to month and there is a minimum payment required after each billing cycle. Each month at the end of the month the complete amount payable on a charge card must be paid.

Needed credit score

Even with a low credit score, you can still get a credit card. For a charge card, you need good to excellent credit.

Card Selection

The selection of credit cards is far greater than that of charge cards. Few card issues offer charge cards, but all offer credit cards.

Credit utilisation

There is a set spending limit on a credit card and your credit utilization or how much of it you are accounts for approximately 30% of your FICO credit score. Your score will probably suffer if you go close to your card's limit. Your credit utilization is not affected if you use a charge card because it has no limit.


Standard fees like late payment, return payment, and cash advance fees apply to both credit cards and charge cards. Annual overseas transaction fees can apply too depending on the card you open. On the other hand, because charge cards require you to pay off your balance in full each month, you won't accrue interest as you can with a credit card.

Thanks for reading the article. Still, if you have any questions or queries in your mind on the Difference between a Charge card and a Credit card then please ask us in the comment section below.

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