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

The main difference between a credit card and a charge card is in how they are used. A credit card allows a customer to borrow funds from a lender, usually a bank or other financial institution, to make purchases and pay them back over time. The lender will charge interest on the amount borrowed, and the customer will need to pay regularly each month to avoid late fees. A charge card, however, is only used to pay for the purchase at the time of the transaction. The customer does not need to borrow funds from a lender, as the company issuing the card pays the merchant, and the customer then pays the card issuer in full. Both credit cards and charge cards come with certain consumer protections, as required by credit card law in Texas. Consumers are protected from unfair or deceptive practices in the issuance, terms, and enforcement of credit cards and charge cards. Additionally, in Texas, cardholders are guaranteed certain rights, such as the right to dispute a charge, the right to cancel a card, and the right to the protection of personal credit information. In summary, a credit card allows the customer to borrow funds from a lender to make purchases and pay them back over time, with interest and potential late fees, while a charge card is used to pay for the purchase at the time of the transaction with no borrowing of funds and no interest charges. Both offer certain consumer protections under Texas credit card law.

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

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