A charge card can be defined as a card that provides a payment method enabling the cardholder to make purchases which are paid by the card issuer. It is the card holder who becomes indebted to the card issuer. It is the duty and responsibility of the cardholder to repay the debt to the card issuer on a particular due date in full. The payments need to be done mainly on a monthly basis. If this is not done then the cardholder will be subject to late fees and fines. Apart from that, there may be some restrictions on the further usage of the card.
It should be noted here that though the terms charge cards and credit cards are used interchangeably, there are certain differences between the two. As you must know, credit cards are considered as revolving credit. Thus, you may not have to pay off the full amount every month. Even if you make the minimum payments, you won’t be charged any fees or fines. However, this is different in case of charge cards. You will have to make the full payments. Both in case of charge credit cards as well as credit cards, you will be able to get online cash advance either through ATM services or over the counter. However, in case of credit cards there will be a limit. In case of charge cards, there is no such limit.
Benefits of charge credit cards over cash
Here are some of the benefits of charge credit cards over cash:
Convenient usage: You can purchase items through charge cards even if you don’t have cash in hand. Most of the business organization, shopping malls, online shopping websites, etc. accept charge credit cards.
Easy to carry: A charge credit card or any type of card is extremely easy to carry compared to that of cash. Moreover, if you find that someone does not accept a charge credit card, then you can simply go to an ATM and get an online cash advance.
Reduce bad checks and collection costs: Accepting payments through charge credit cards is a good option for business organizations. The orders will be screened and it will reduce the number of fraudulent transactions. In the long run it reduces the number of bad checks as well as collection costs.
Preference: You will be surprised to note that Governments as well as large business organizations use the option of charge cards in order to pay for and keep track of expenses related to the official business. As a result, these cards are also known as purchasing cards. There are some top retailers like Neiman Marcus who issue charge cards to customers. Apart from that, American Express and Diners Club cards are also charge cards, rather than credit or debit cards like VISA and MasterCard.
Now that you know the benefits of charge credit cards over cash, you can now choose the best payment option for yourself. However, you will have to make sure that you don’t miss the full payments on your charge cards at the end of the month.
This guest post is a contribution by Janice Thompson.