Charge Card vs Credit Card: Overview and Key Differences

Why always dig into savings when charge and credit cards offer spending flexibility and help build credit scores? As of FY25, 10.80 crore credit cards are already in circulation and charge cards are attracting attention with their higher spending flexibility.

However, there are significant differences between a charge card vs credit card that you must learn and choose one according to your requirement. 

Quick Synopsis

• A charge card comes with no predetermined credit limit.
• You can get a credit card from banks and NBFCs with a predetermined limit based on multiple factors.
• Only American Express facilitates charge cards, making it less available than credit cards.

What are  Charge Cards?

If you are a frequent traveller or a shopper and are looking for higher flexibility in terms of credit limit, a charge card might be the right solution. Here is a detailed breakdown of its exclusive features before diving into the differences between charge card vs credit card:

• In India, if you have a decent credit score, you can opt for a charge card that comes with no upper credit limit. 
• Thus, it offers you a higher purchasing power without thinking about your remaining credit limit.
• However, only American Express offers such cards, the American Express Platinum Card and the Gold Card. However, annual fees for these cards are high, up to ₹66,000.

What are Credit Cards?

Before discussing the distinctions between a charge card vs credit card, learning about only a charge card is not enough. A brief on credit cards and their working process is as follows:

• In India, if you have a credit score of at least 750 and a stable source of income, you can apply for credit cards. Most financial institutions offer you a credit card.
• Depending on other factors such as previous payment history, current debt, etc., you get a predetermined credit limit that you can spend. 

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Key Differences Between a Charge Card vs Credit Card

Here are the top 5 differences between charge card and credit card that you must take note of and apply accordingly:

Which One Should You Choose Between Charge Card vs Credit Card?

1. If you have enough income and are confident to pay card dues in full every month, opt for a charge card. Failure to pay in full results in additional charges and impacts the credit score.
2. If you need an urgent credit line, you should opt for a credit card, as applying and getting approval from American Express might be time-consuming. 
3. Credit cards also come in variants such as UPI credit cards. These let you pay at merchant locations using your credit card instead of a debit card, and therefore go for a credit card for such flexibility, amongst others.  

Final Word

The main difference between a charge card vs credit card is that the former lets you spend without worrying about an upper credit limit, but requires repayment in full. On the other hand, the latter comes with a predetermined limit but is less expensive and widely available. 

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