Charge Cards

A charge card is a type of payment card that requires customers to pay their balance in full each month and thus do not have an interest rate or involve finance charges. Charge cards also feature no-preset spending limits that automatically adjust to customers’ spending patterns, offering needed flexibility for travel and entertainment expenditures. American Express first introduced the charge card in 1958 and continues to dominate this segment of the payment cards market – here are the best charge card offers.

A charge card is a type of payment card that requires customers to pay their balance in full each month and thus do not have an interest rate or involve finance charges. Charge cards also feature no-preset spending limits that automatically adjust to customers’ spending patterns, offering needed flexibility for travel and entertainment expenditures. American Express first introduced the charge card in 1958 and continues to dominate this segment of the payment cards market – here are the best charge card offers.

Best charge cards of 2020:


Credit Recommended (740-850) credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.
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Rewards Rate

7x on rideshare
4x on travel
3x on restaurants
2x on software subscriptions
1x on all other transactions

At A Glance

Intro Bonus
30,000 points

30,000 in Brex Rewards points upon signup and waived card fees for life (equal to $300+ value)*

Annual Fee
Up to $60
Regular APR

Editorial disclosure: All reviews are prepared by staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the bank's website for the most current information.

Comparing Charge Card Offers

Updated: February 28, 2020

Charge cards aren’t for everyone, but if you want superior rewards and you don’t mind a higher annual fee, they can be a good choice. They are helpful if you sometimes need to buy big-ticket items or if you want to get organized with your cards. Curious about whether they are right for you? Here, we look at:

Learn more about these financial products below!

What is a charge card and how do they work?

A charge card is a card that allows users to be approved for large sums on the spot. The card issuer bases its decision on your past purchases and payments. While there’s no set limit, it’s not unlimited. The trade-off is that you need to pay in full each month, whereas with a credit card, you can pay a minimum.

“The main advantage of a charge card is that you avoid interest fees because you’re required to pay the balance in full at the end of every month,” says Ted Rossman, who is’s industry analyst. “The main disadvantage of a charge card is that you don’t have the flexibility to carry a balance from time to time. Paying the bill in full is an important goal for any credit cardholder, but it’s an absolute necessity if you have a charge card.”

If you aren’t carrying a balance, the average debt per card is $1,154, according to That means it is charged, but paid off each month. Compare that to $7,527 per card that usually carries a balance. That means that the debt on a card that doesn’t carry a balance is typically considerably lower than a card with a balance.

Looking at how many people don’t carry a balance – and might do well with a charge card – we’ve found that about 29% of accounts are paid in full each month, while accounts with a balance are almost 44%:

How many accounts get paid off each month…

  • Accounts that carry a balance
  •  43.7%
  • Accounts that pay off balance each month
  •  29.1%
  • Dormant accounts
  •  27.2%

American Bankers Association survey

According to Bankrate, charge cards were once tied to rich rewards on spending and benefits that credit cards couldn’t match. But in recent years, credit cards have aggressively explored the market, and there are now a number of premium credit cards with high-end features that rival those of the highest end charge cards.

While American Express is the primary network that provides charge cards, there are a few gas and retail charge cards still available. However, most of those are co-branded credit cards with a Visa, Mastercard or American Express logo, which means they are available where the network is used.

Best charge cards of 2020

The Plum Card® from American Express

The Plum Card from American Express certainly has one of the most distinctive designs out of all charge cards. It offers a 1.5% discount on your statement when you pay early. You also have the option of delaying payment for up to 60 days, but you would forfeit the 1.5% discount in doing so. While this flexibility is nice to have, business owners may find the Plum Card lackluster considering the bevy of business credit products on the market today.

The Business Platinum Card® from American Express

A high annual fee of $595 is accompanied by high rewards rates, especially on flights and prepaid hotels on, which earn 5X points per dollar spent.

Business Green Rewards Card from American Express

The card allows you to earn one Membership Rewards® point for each dollar that you have spent on eligible purchases. There is also a $0 introductory annual fee for the first year, then after that, it is a $95 annual fee.

The information about the Business Green Rewards Card from American Express has been collected independently by The card details on this page have not been reviewed or provided by the card issuer. 

Difference between credit cards and charge cards

While in some ways credit cards and charge cards are similar, such as both can help you build credit, in other ways they are quite different. Here, we look at how elements such as annual fees and interest work:

  • Spending limit: While a charge card has no preset spending limit, that doesn’t mean your spending is unlimited. Rather, your limit is tied to your past spending and payments, or how much the issuer feels you can afford.
  • Interest: Because you pay in full each month on a charge card, no interest is charged.
  • Late fee: Rather than charging interest, with a charge card, you can face a late fee that is usually a percentage of the past due late amount. For example, if you are late on a $10,000 charge card bill, says Bankrate, and the late payment penalty is 2.99%, you’ll owe an additional $299.

Here are key ways how charge cards and credit cards differ:

Differences between charge cards, credit cards…

Charge card Credit card
Pay in full each month Can pay the minimum each month
No specified limit Has credit limit
Can be approved for large sums Penalized for going over the limit
Builds credit Builds credit
Often with a high annual fee Can have no annual fee
Typically through Amex Most major banks

How do charge cards affect credit?

While the term “charge card” is sometimes used interchangeably with the term “credit card,” the two are quite different in a number of ways, not least of which is how they impact your credit.

“As a charge card has no credit limit, they are typically bypassed in revolving utilization rate calculations in FICO scores,” says Tom Quinn, FICO’s vice president of scores. “Revolving utilization is the ratio of your revolving balances divided by your revolving credit limits. FICO research has found that the higher the ratio, the greater the risk the consumer poses to default on their credit obligations.

“However, other information on your charge card reported to the credit bureaus will be assessed a FICO score, which can impact the score,” says Quinn. “Total and revolving balances owed are often considered in a FICO score and charge card balances can factor into these attributes. Your payment history on the charge card is considered as well as the length of time you’ve had the account – so making sure you pay your charge card balances as agreed is extremely important.”

Advantages of charge cards

Charge cards have a host of advantages, including no preset spending limit and excellent rewards and benefits. Here are some very good reasons for getting a charge card:

  • No preset spending limit. Likely the greatest advantage of a charge card is that there is no preset spending limit, which is perfect for a business owner who may need to make large purchases on the fly.
  • Generous rewards and benefits.
  • Encourages discipline. Because charge cards require you to pay in full by the due date, you can use the requirement as a way to discipline yourself not to carry a balance.
  • Don’t incur interest charges. Another advantage to paying in full each month is that you don’t end up paying interest charges.
  • Good for building credit. Charge cards are a great way to build credit because the good habit of on-time payments are actually the most important aspect of your FICO credit score.
  • Your account is safer. Just as credit cards are protected by the Credit CARD Act of 2009, so too are charge cards. That means that while you may not be protected if a bad guy accesses your debit card, charge cards – and credit cards – have significant protections in place.

Pitfalls of charge cards

While charge cards have some definite advantages, there are a few reasons why they may not be right for you. You have to weigh the advantages with the downsides to these cards:

  • Must pay in full by due date. If you have a likelihood of carrying a balance on your card, a charge card may not be the best choice. Instead, look for a credit card with a low interest or 0% intro offer on purchases.
  • A missed bill can mean a sizable penalty. For example, with the Business Platinum Card from American Express, you can be charged $39 or 2.99% (see rates and fees) Who should use a charge card?Business charge cards and credit cards each have their advantages, but in general, you’ll want to review the rewards, compare the perks against the annual fee, check your monthly spend and total up your business cash flow. Charge cards are right for people who are organized and might need the convenience of no preset limit and superior benefits. Here are people who might benefit from having a charge card:
    • A business person. The charge card is perfectly suited for a business person who periodically needs to make large purchases and a credit limit won’t work. You can be approved in minutes right at the counter.
    • Someone who can pay in full each month. If you can’t pay in full each month, this is not the card for you. You’ll want to be organized enough to be able to only put on the card what you can afford to pay back by the due date.
    • A person with excellent credit. Charge cards are best for someone who has very good or excellent credit. That’s because these cards typically require better credit.
    • Someone who wants rich rewards. Charge cards often come with rich offerings, such as generous rewards for business expenses.
    • A person who doesn’t mind a high annual fee. These cards typically have a high annual fee, but at the same time, their rewards can be pretty great, so it’s a tradeoff.

  • Laura is an editor and writer at She has written extensively on all things credit cards and works to bring you the most up-to-date analysis and advice. Laura’s work has been cited in such publications as the New York Times and Associated Press. You can reach her by e-mail at and on Twitter @creditcards_lm.

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