Charge card

A charge card is a card you use like a credit card, but whose whole balance is due every statement period. You cannot pay part of it and carry the rest. Because there is no revolving balance, there is usually no interest. Paying late brings fees instead and can get the card suspended.

How it differs from a credit card and a debit card

• Credit card: you can pay the minimum and carry the rest, paying interest on what remains.
• Charge card: you borrow until the statement date, then repay everything.
• Debit card: the money leaves your bank account at the time of purchase.

Spending limits

Many charge cards have no preset spending limit. The issuer decides what it will approve based on your payment history, income or cash balance, and that amount can change from month to month. No preset limit does not mean unlimited: a large purchase can still be declined.

Charge cards in business

American Express is the issuer most associated with charge cards, and many corporate card programs work the same way: the company pays the full statement each month, or more often. For finance teams, that keeps card spending from turning into debt, and it means every charge must be accounted for before the next payment.

In the books, a charge card works like any other card. The statement shows a merchant and an amount, not what was bought or how much tax was included. Each charge still needs a receipt and a category before it can be posted, and matching receipts to card lines is where most of the monthly effort goes.