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

The difference between a credit card and a charge card is based on how they are used and when the payment is due. A credit card allows the user to borrow money, up to a certain limit, and pay it back with interest over time. A charge card requires the user to pay their bill in full each month. In California, the Credit Card Act of 2009 requires credit card companies to give consumers a 45-day grace period to pay the balance on their credit cards before fees or interest are charged. Charge cards do not offer a grace period, so you must pay your balance on time or you will be charged a fee. Credit cards also offer more rewards and other incentives, such as cash back or airline miles. Charge cards may offer some rewards, but they are typically less generous than credit cards. Both credit cards and charge cards can be used to make purchases and access cash advances, but credit cards typically have higher limits than charge cards. Credit card companies also pull your credit report when you apply for a credit card, whereas charge cards typically do not. In California, credit card and charge card laws are set in accordance with the Credit Card Accountability Responsibility and Disclosure Act of 2009. This act requires credit card companies to ensure that all terms and conditions of credit and charge cards are clearly disclosed and that consumers are treated fairly. It also requires issuers to provide additional protection for young credit and charge card users.

Related FAQs

What is the difference between a credit card and a charge card?
What happens when I miss a credit card payment?
What is a Fair Credit Billing Act?
How do I calculate my credit card APR?
What is a fraud alert?
What are the different types of interchange fees?
What is a credit score?
What is a secured credit card?
Can a creditor charge a late fee for a credit card payment?
Do I need to provide personal information to get a credit card?

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

Related FAQs

Related Blog Posts