Charge Card

From Financial Literacy Wiki

Charge Cards allows one to make purchases without immediate payment of cash and are usually offered by retailers or financial institutions for their customers.

Retail stores offer customers such a facility to entice them to make more purchases in and from their stores only. Since customers spend first and are billed later, they get to enjoy the benefits of the goods/services before they have the money to pay for it. For most of the retailers, they would require customers to pay the full amount, several days after billing date. And usually, they do not allow customers to carry forward outstanding purchases. It is advisable to look through the "Terms and Conditions" and get more information on the usage of the charge cards. This is because each retailer offer very different packages to holders of their charge cards.

Another type of charge card is those offered by institutions such as American Express and Diner's Club. The difference between this type of charge cards and those offered by retailers is that their cards are accepted in any stores that accept them, usually restaurants, airlines, boutiques and so on. And that is the only difference. The full amount, similar to retail charge cards, has to be settled several days after billing date.