What is the difference between a charge card and a credit card?

Question

ClearValue Editorial Team · Accepted Answer

A credit card lets you carry a balance month to month, subject to interest. A charge card requires you to pay the full balance every cycle — no revolving credit, usually no preset spending limit, and no purchase interest because carrying a balance isn't allowed. Both are payment cards accepted wherever their network runs; the structural difference is repayment. Charge cards typically have no preset spending limit — your spending power flexes with income, history, and usage rather than a fixed cap — and require full payment each cycle, with late payments penalized and non-payment leading to suspension. Because you can't revolve a balance, there's no purchase APR, though charge cards often carry higher annual fees tied to premium benefits. A useful side effect: because charge cards have no preset limit, they're generally excluded from the credit utilization calculation in FICO scores, so a high balance on one typically doesn't hurt utilization the way a maxed-out credit card would.