Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.
While charge cards and credit cards share a similar appearance and function, they operate differently. Both let you buy now and pay later, but their repayment terms can vary considerably.
Charge cards are less common than credit cards. CNBC Select reviews the key differences to help you decide which is right for you.
What we'll cover
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Are credit cards and charge cards the same?
Although charge cards and credit cards may be used interchangeably, they are not the same. Credit cards allow you to carry a balance from one billing cycle to the next, while charge cards typically need to be paid in full each month. Because of how charge cards function, things like interest rates, credit limits and approvals may differ from traditional credit cards.
Key differences between charge cards and credit cards
Charge cards and credit cards are both great ways to pay for your day-to-day needs, but it's important to know how they differ so you aren't caught off guard.
Charge card vs. credit card
| Charge card | Credit card | |
|---|---|---|
| Interest rate | Often no interest rates as you can't carry a balance | Fixed or variable APRs |
| Credit limit | No preset spending limit | Fixed maximum credit limit |
| Payments | Usually must be paid in full each month | Can carry a balance from month to month, but will generate interest |
| Recommended credit score | May require above-average credit scores | Available for all credit ranges |
| Annual fee | Usually, but will vary by card | Varies by card |
| Rewards | Varies by card | Varies by card |
Interest rates
Charge cards generally don't allow you to carry a balance, so they don't have interest rates associated with them. However, some charge cards may offer an optional pay-over-time feature that acts similarly to carrying a balance, which would come with interest.
Meanwhile, credit cards have interest rates because you can carry a balance. Interest rates can vary significantly by credit card and cardholder since your credit history is a factor.
As of December 2024, the average credit card APR is 21.76% according to the Federal Reserve. And because credit card issuers usually compound interest daily, your balance grows a little each day it goes unpaid. However, there are a number of credit cards with an introductory 0% APR period, typically ranging from six to 21 months, including the following:
The Wells Fargo Reflect® Card is one of the absolute best cards you can apply for if you want to save on interest and pay down debit quickly thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
- Incredible intro-APR for purchases and qualifying balance transfers
- No annual fee
- Cell phone insurance: up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible
- No rewards
- No welcome bonus
- High balance transfer fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.74%, 24.24%, or 28.49% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
5%, min: $5
Foreign transaction fee
3%
The Citi Simplicity® Card has amazing intro-APR offers and is particularly valuable for balance transfers due to its lower introductory fee.
- Long intro APR offers for balance transfers
- Low intro-fee for balance transfers
- No annual fee
- No rewards
- No welcome bonus
Credit limit
Charge cards typically don't have preset spending limits, so you may have more flexibility to make bigger purchases. But this doesn't mean you have unlimited spending power. Instead, your purchases may be approved based on several factors including your income, repayment history and credit utilization ratio.
Credit cards have a maximum credit limit determined by your financial institution. If you attempt to spend more than your credit limit, your purchase may be denied or your card issuer may ask if you want to approve the transaction in exchange for an over-limit fee. You'll also need to watch your credit utilization ratio with credit cards, as that makes up 30% of your FICO credit score.
Payment
Since charge cards generally don't allow you to carry a balance, you must pay off your balance in full each month. There is no interest or minimum payment option. Any missed or late payments could result in fees and other penalties, depending on the card.
Credit cards give you the flexibility to carry your balance over time, which means you have the option to make only the minimum payment by the due date. However, the rest of your balance that you are carrying will begin to generate interest, unless you have a promotional APR offer.
Recommended credit score
Charge cards often have higher credit score requirements for approvals due to the risks of an uncapped spending limit. So you'll want to aim for a good or excellent credit score (scores of 670 and above) to qualify for a charge card.
Credit cards, on the other hand, are much more accessible with fewer barriers to entry. There are a variety of credit cards available to many different credit profiles, including easy-to-get card options for those with bad credit or no credit at all.
Annual fee
Annual fees can vary considerably by card. There are both charge cards and credit cards with no annual fees, but charge cards often have higher annual fees. This is because charge cards have greater spending flexibility and the issuers are less likely to make money on interest charges.
Rewards and benefits
Both charge cards and credit cards can offer competitive rewards programs and other perks, but it ultimately boils down to your specific card.
Do charge cards affect your credit score?
Both charge cards and credit cards can affect your credit score.
Since charge cards don't have a preset spending limit, they won't affect your credit utilization rate. However, they affect other credit score factors like payment history, credit mix, amount owed and more, so it's still important to practice good habits to build up your score.
Should I get a charge card or a credit card?
Whether you should get a charge card or credit card comes down to accessibility and personal preference. Many charge cards are geared toward businesses, so it may be harder to open a personal one.
For those looking for a card with similar features, such as no preset spending limits*, Amex has a few options including the American Express® Gold Card and the American Express Platinum Card®. Each card has its strength with the Amex Gold's perks focused on dining and groceries and the Amex Platinum delivering more premium travel benefits. Both cards earn American Express Membership Rewards, which are some of the most versatile rewards points on the market.
The American Express Gold Card is great for earning valuable Membership Rewards® points at restaurants worldwide and U.S. supermarkets. Membership Rewards® points transfer to many of the top airline and hotel loyalty programs, which makes this card one of the best options for earning travel rewards.
- You can earn $400+ in dining and rideshare credits every year (Enrollment required for select benefits mentioned)
- Exceptionally rewarding for eligible restaurant and U.S. supermarket purchases
- No foreign transaction fees
- Large annual fee
- Credits are more complicated, you earn them monthly or semi-annually
- Spending caps on the top bonus categories
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you're approved and find out your exact welcome offer amount – all with no credit score impact. If you're approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App™.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App™, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App™ and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You'll know upfront exactly how much you'll pay.
- $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That's up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- Enjoy complimentary Hertz Five Star® Status benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Book two nights or more with The Hotel Collection through AmexTravel.com or the Amex Travel App™ and receive a $100* credit towards eligible charges at over 1,400 upscale hotels worldwide. *Eligible charges vary by property.
- Book your travel through the Amex Travel App™ with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
- See Rates & Fees
Foreign transaction fee
None
The American Express Platinum Card® is a premium card loaded with annual statement credits, entertainment benefits, extensive airport lounge access, elite status perks and more. (Enrollment required for select benefits mentioned)
- Access to 1,550+ airport lounges, including Priority Pass™ lounges (enrollment required) and Amex Centurion lounges
- Statement credit offers worth up to twice what the annual fee costs
- Elite status perks for hotels and rental cars (Enrollment required for select benefits mentioned)
- High annual fee
- Many statement credit offers are complicated and are earned in increments or limited to specific purchases
- Not as rewarding for purchases as other lower-fee travel cards
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- You may be eligible for as high as 175,000 Membership Rewards® points after you spend $12,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you're approved and find out your exact welcome offer amount – all with no credit score impact. If you're approved and choose to accept the Card, your score may be impacted.
- Get more for your travels with 5X Membership Rewards® points on all flights and prepaid hotel bookings through American Express Travel®, including Fine Hotels + Resorts® and The Hotel Collection bookings. You earn 5X points on flights purchased directly from airlines or through American Express Travel® on up to $500,000 on these purchases per calendar year.
- With over 1,550 airport lounges - more than any other credit card company on the market* - enjoy the benefits of the Global Lounge Collection, over $850 of annual value, with access to Centurion Lounges, 10 Delta Sky Club visits (subject to visit limitations) when flying on an eligible Delta flight, Priority Pass™ membership (enrollment required), and other select partner lounges. *As of 01/2026
- $200 Uber Cash + $120 Uber One Credit: With the Platinum Card® you can receive $15 in Uber Cash each month plus a bonus $20 in December when you add your Platinum Card® to your Uber account to use on rides and orders in the U.S when you select an Amex Card for your transaction. Plus, when you use the Platinum Card® to pay for an auto-renewing Uber One membership, you can get up to $120 in statement credits each calendar year. Terms apply.
- $300 Digital Entertainment Credit: Experience the latest shows, news and recipes. Get up to $25 in statement credits each month when you use your Platinum Card® for eligible purchases on Disney+, a Disney+ bundle, ESPN streaming services, Hulu, The New York Times, Paramount+, Peacock, The Wall Street Journal, YouTube Premium, and YouTube TV when you purchase directly from one or more of the providers. Enrollment required.
- $600 Hotel Credit: Get up to $300 in statement credits semi-annually on prepaid Fine Hotels + Resorts® or The Hotel Collection* bookings through American Express Travel® using the Platinum Card®. *The Hotel Collection requires a minimum two-night stay.
- $400 Resy Credit + Platinum Nights™ by Resy: Get up to $100 in statement credits each quarter when you use the Platinum Card® to pay for eligible purchases with Resy, including dining purchases at over 10,000 qualifying U.S. Resy restaurants. Enrollment required. As a Platinum Card® Member you have special access to reservations on select nights at participating sought after Resy restaurants in select cities through Platinum Nights™ by Resy. Simply add your Platinum Card® to your Resy profile to book your reservation.
- $219 CLEAR+ Credit: CLEAR+ helps get you to your gate faster by using your face to verify you are you at 55+ airports nationwide. You can cover the cost of a CLEAR+ Membership* with up to $219 in statement credits per calendar year after you pay for CLEAR+ with your Platinum Card®. *Excluding any applicable taxes and fees. Subject to auto-renewal.
- $200 Airline Fee Credit: Select one qualifying airline and then receive up to $200 in statement credits per calendar year when incidental fees, such as checked bags and in-flight refreshments, are charged by the airline to the Platinum Card® Account. American Express relies on airlines to submit the correct information on airline transactions to identify incidental fee purchases. If you do not see a credit for a qualifying incidental purchase on your eligible Card after 8 weeks, simply call the number on the back of your Card. Qualifying airlines are subject to change. See terms & conditions for more details.
- Start your vacation sooner and keep it going longer. When you book Fine Hotels + Resorts® through American Express Travel®, enjoy noon check-in, when available, and guaranteed 4PM late check-out.
- $300 lululemon Credit: Enjoy up to $75 in statement credits each quarter when you use the Platinum Card® for eligible purchases at U.S. lululemon retail stores (excluding outlets) and lululemon.com. That's up to $300 in statement credits each calendar year. Enrollment required.
- $155 Walmart+ Credit: Get up to a $12.95* statement credit back each month after you pay for a monthly Walmart+ membership (subject to auto-renewal) with your Platinum Card®. *Up to $12.95 plus applicable taxes on one membership fee.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- $895 annual fee.
- Terms Apply.
- See Rates & Fees
Balance transfer fee
N/A
Foreign transaction fee
None
If you prefer a more traditional credit card experience, there are a wide range of cards that could be a good fit. If you're in the market for a rewards card, the Chase Freedom Unlimited® offers several valuable bonus categories and a generous welcome bonus — all for no annual fee (see rates and fees).
The Chase Freedom Unlimited® is a no-annual-fee card that earns generous cash-back on everyday purchases and a lucrative welcome bonus. Plus, if you pair it with a premium Chase credit card that allows point transfers, you can convert your cash back into flexible travel rewards.
- Users get a high rewards rate and strong welcome bonus
- Purchases and balance transfers receive an intro APR
- No annual fee
- Has a foreign transaction fee
- Few rewarding ongoing benefits
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Enjoy 5% cash back on travel purchased through Chase TravelSM, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.
- No minimum to redeem for cash back. You can use points to redeem for cash through an account statement credit or an electronic deposit into an eligible Chase account located in the United States!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.24% - 27.74%.
- No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, in the first 60 days. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
3% of each transaction in U.S. dollars
Pro tip: You can pair this card with a Chase bank account
When you open a *Chase Total Checking® account, you can earn a $300 bonus after you make at least $500 in direct deposits within 90 days of opening the account. You can also waive the monthly maintenance fee with qualifying activities.
Chase Total Checking®
Annual Percentage Yield (APY)
N/A
Minimum balance to open
$0
Monthly service fee
$12 ($15, effective August 24, 2025) or $0 with one of the following, each monthly statement period: Electronic deposits made into this account totaling $500 or more, such as payments from payroll providers or government benefit providers, by using (i) the ACH network, (ii) the Real Time Payment or FedNowSM network, (iii) third party services that facilitate payments to your debit card using the Visa® or Mastercard® network, OR a balance at the beginning of each day of $1,500 or more in this account, OR an average beginning day balance of $5,000 or more in any combination of this account and linked qualifying Chase checking, savings, and other balances.
Free ATM network
With over 4,700 branches, Chase has the largest branch network in the U.S. plus access to more than 15,000 ATMs.
ATM fee reimbursement
None
Overdraft fee
$34
Mobile check deposit
Yes
Terms apply.
JPMorgan Chase Bank, N.A. Member FDIC
Information about Chase Total Checking® has been collected independently by CNBC Select and has not been reviewed or provided by the issuer of the card prior to publication.
Pros and cons of charge cards
- No preset spending limit: Charge cards don't have a hard limit on your spending, but often adjust based on your finances and spending history.
- Avoid debt and interest: Since charge cards don't allow you to carry a balance, you won't collect debt or pay interest.
- Generates rewards: Many charge cards still have competitive rewards offerings.
- Can't carry a balance: Charge cards typically require you to pay off your balance in full each month, otherwise you face a penalty.
- Higher credit score requirements: Charge cards may often have higher credit score requirements than traditional credit cards.
- Larger annual fees: Charge cards can carry hefty annual fees.
- Limited availability: Personal charge cards are not very common anymore, and may require some searching.
FAQs
Is a charge card the same as a credit card?
No, a charge card and a credit card are different in a number of ways, including payment schedules, credit usage and interest rates.
What are some disadvantages of a charge card?
Some drawbacks to having a charge card could be higher credit score requirements, larger annual fees, and not being able to carry a balance.
Is there a spending limit on a charge card?
Traditionally, charge cards do not have a preset spending limit, but this doesn't mean you're allowed unlimited spending. Spending limits on a charge card will often vary based on factors such as your spending history and income.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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*No Preset Spending Limit means the spending limit is flexible. In fact, unlike a traditional credit card with a set limit, the amount you can spend adapts based on factors such as your purchase, payment, and credit history.
* Information about Chase Total Checking® has been collected independently by CNBC Select and has not been reviewed or provided by the issuer of the card prior to publication.
For rates and fees of the American Express® Gold Card, please click here.
For rates and fees of the American Express Platinum Card®, please click here.
