Charge Cards
Spend it, charge it to your card and pay it back at the end of the month. The convenience of the charge card also comes with enhanced rewards but is really aimed at the mid to higher end of the market.
More from Types of Credit Cards
7 January 2009
Charge cards
Charge cards are similar to credit cards and allow the user to pay for goods and services on interest free credit.”
Charge cards are more rewarding
Charge cards were first introduced onto the American market in 1950, with the first UK charge card available from 1951. The market has inevitably become more sophisticated since then but the concept remains the same.
Charge cards are similar to credit cards and allow the user to pay for goods and services on interest free credit. However, it is important that - unlike credit cards - you pay back the full balance at the end of the month or you may be liable to a hefty penalty interest charge.
Charge cards can also be called travel and entertainment cards and there isn’t a credit limit on them. You can usually charge as much as you want – as long as you pay off your balance in full. This is on the proviso that the card provider thinks you can afford your spending. You may have to show proof of resources when you apply.
The higher end of the market
In order to qualify for a card you will need to have a good credit rating and a certain salary level. But the rewards to the user are plentiful, with the number of perks rising with the level of card – standard, gold or platinum.
The benefits
These range from supplementary cards, travel accident benefit, savings on flights and travel benefits, hotel discounts and entry to VIP airport lounges for example. You usually pay an annual fee for the card but this can outweigh the benefits and convenience of holding one.
Business charge cards
There are a few major players in the consumer charge card market although it is possible to have a business charge card as well. These are usually for partnership and limited company customers. The emphasis, as expected, is much more on simplifying day-to-day finances, discounts for the business, greater security and cash flow control.
Business charge cards are worth considering for the extra benefits they provide such as travel accident insurance and discounts on goods and services. The annual charges aren’t too prohibitive either with an average £23 on a business card and an average £79 on a business premium card.
