Credit Card FAQ
What is the Difference between a Charge Card and a Credit Card?
With the current economical downturn, the financial market has seen a number of new credit schemes bought into place through a variety of new credit cards. One that has been amongst great speculation is commonly known by the name of a charge cards. There has been a lot of talk about what a charge card is and how it differs from a credit card. Trying to find the answer to this question has proven to be quite difficult as no one has really been able to give a full in depth answer as to what differentiates the two cards from one another. We are going to take a look at both these cards in much more detail.
Credit cards are something that we all are more or less familiar with. It is a card that gives us the right to purchase items of what ever sort on credit. The limit that you can spend on your credit card is known to vary quite significantly based on your credit rating and whether or not you keep up to date with your return payments. When the time does come to repaying the credit that you used on the card, you will be required to pay interest on top of the initial capital.
Charge cards are quite similar to credit cards as well. They also are known to offer a certain amount of credit that you can spend on your particular card. The only main difference with a charge card is that you are required to make the full payment by the end of each month.
With a credit card, how it works is that even though you might have spent quite a lot of money on credit during a particular month, you are not required to pay it all back by the end of the month. Instead, you have to ensure yourself that you at least pay back the mere minimum that is required every month. This month is usually set by the credit card company in advance. With a charge card however, you have no choice but to pay the full amount that you borrowed during your entire month. It is for this reason that most charge cards are automatically linked to a persons debit cards so that at the end of each month, the outstanding bill is automatically deducted.
Choosing between a credit card and a charge card can be a difficult choice to make, however depending on the sole nature that you are planning to use it for, one card may prove to be better than the other. At the current moment in time, there are a large number of financial institutions that are offering a wide variety of credit cards and charge cards to choose from. Some are known to offer more competitive rates in comparison to others which are why it is a good idea to take your time to surf the market before making a commitment. It is also a good idea to visit a financial advisor in regards to which card would be best suited for your needs.
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