What is the difference between a charge card and a credit card?
A charge card does not have an interest rate and requires you to pay your balance in full at the end of each billing cycle instead of making payments on the balance over several months. Generally, charge cards don’t have a preset credit limit, and give you a limitless amount of credit. If you do not pay your balance, although there are no interest charges, you will be charged a late fee and it will affect your credit score. Usually you need very good credit to get a charge card. Click here to view the charge cards that I have posted about. (Think Amex)
A credit card does have an interest rate and allows you to have a revolving balance that you can pay off over a period of time (with interest). Generally, credit cards have a credit limit. If you do not make a set minimum payment by the due date, you will be charged a fee and obviously will incur interest. You can avoid paying interest on a credit card by paying the balance in full before the grace period ends. You do not need to have as good of credit to get a charge card versus a credit card. HOWEVER! the difference between a charge card and a credit card shouldn’t really matter if you want to play the points game. Don’t forget, the only way to successfully play the game is to not incur interest charges or fees. These interest charges/fees can negate any amount of money you save on free travel. Remember, I taught you that in #4 in Let’s Get Started To Earning Free Travel. So regardless of what type of card you have, credit or charge, don’t carry a balance. Pay if off each month!