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Charge Card

 
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A charge card is a means of obtaining a very short term (usually around 1 month) loan for a purchase. It is similar to a credit card
Credit card

A credit card is part of a system of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holders promise to pay for these goods and services....
, except that the contract with the card issuer requires that the cardholder must each month pay charges made to it in full—there is no "minimum payment" other than the full balance. Since there is no loan, there is no official interest. A partial payment (or no payment) results in a severe late fee (as much as 5% of the balance) and the possible restriction of future transactions and risk of potential cancellation of the card.

In contrast, a credit card is a revolving credit
Revolving credit

Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Examples of revolving credits used by consumers include credit cards....
 instrument which does not need to be paid off in full; no late fee is charged as long as the minimum payment is made, which carries a balance
Balance (accounting)

In banking and accountancy, the outstanding balance is the amount of money owned, , that remains in a deposit account at a given date, after all past remittances, payments and withdrawal have been accounted for....
 forward as a loan charging interest.






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A charge card is a means of obtaining a very short term (usually around 1 month) loan for a purchase. It is similar to a credit card
Credit card

A credit card is part of a system of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holders promise to pay for these goods and services....
, except that the contract with the card issuer requires that the cardholder must each month pay charges made to it in full—there is no "minimum payment" other than the full balance. Since there is no loan, there is no official interest. A partial payment (or no payment) results in a severe late fee (as much as 5% of the balance) and the possible restriction of future transactions and risk of potential cancellation of the card.

In contrast, a credit card is a revolving credit
Revolving credit

Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Examples of revolving credits used by consumers include credit cards....
 instrument which does not need to be paid off in full; no late fee is charged as long as the minimum payment is made, which carries a balance
Balance (accounting)

In banking and accountancy, the outstanding balance is the amount of money owned, , that remains in a deposit account at a given date, after all past remittances, payments and withdrawal have been accounted for....
 forward as a loan charging interest. Many people are not aware of this distinction however, and often the two terms are used interchangeably to describe any card which can be used as payment.

Many charge cards have the option for users to pay for some purchases over time. American Express
American Express

American Express Company , sometimes known as "AmEx" or "Amex", is a Diversification global financial services company that is headquartered in New York City, New York....
 charge card customers, for instance, can enroll in the Extended Payment Option (internally referred to as EXPO) to be able to pay for purchases over $200 over time, or in Sign & Travel to be able to pay for eligible travel-related expenses over time.

Government
Government

Government is the body within any organization that has the authority to make and the power to enforce laws, regulations, or rules. Typically, the government refers to a civil government -- local, provincial, or national -- but commercial, academic, religious, or other formal organizations are also administered by governing bodies....
s and large business
Business

A business is a legally recognized organization designed to provide good s and/or Service to consumers. Businesses are predominant in capitalism economies, most being privately owned and formed to earn profit that will increase the wealth of its owners....
es often use charge cards to pay for and keep track of expenses related to official business; these are often referred to as purchasing card
Purchasing card

A purchasing card is a form of company credit card that allows goods and services to be procured without utilising a traditional purchasing process....
s. Some high-end retailers like Neiman Marcus
Neiman Marcus

Neiman Marcus is a luxury specialty retail department store, operated by the Neiman Marcus Group in the United States. The company is headquartered in Dallas, Texas, Texas, and competes with other exclusive department stores such as Barneys New York, Saks Fifth Avenue, Nordstrom, Lord & Taylor, and Bloomingdale's....
 issue charge cards to customers. Some American Express
American Express

American Express Company , sometimes known as "AmEx" or "Amex", is a Diversification global financial services company that is headquartered in New York City, New York....
 and Diners Club
Diners Club

Diners Club International, originally founded as Diners Club, is a charge card company formed in 1949 by Frank X. McNamara, Ralph Schneider, and Matty Simmons....
 cards are also charge cards, rather than credit or debit card
Debit card

A debit card is a plastic card which provides an alternative payment method to cash when making purchases. Functionally, it can be called an electronic check, as the funds are withdrawn directly from either the bank account , or from the remaining balance on the card....
s like VISA
VISA (credit card)

Visa Inc. , commonly referred to as VISA , is a multinational corporation based in San Francisco, California, United States. The company operates the world's largest retail electronic payment network, managing payments among financial institutions, merchants, consumers, businesses and government entities....
 and MasterCard
MasterCard

MasterCard Worldwide is a multinational corporation based in Purchase, New York, New York, United States. Throughout the world, its principal business is to process payments between the banks of merchants and the banks of purchasers that use its "MasterCard" brand Debit card and credit cards to make purchases....
. In Europe, however, the MasterCard-affiliated Maestro
Maestro (debit card)

Maestro is a multi-national debit card service owned by MasterCard. Maestro cards are obtained from associate banks and can be linked to the cardholder's current account, or they can be Prepaid cards....
 brand replaced the European Eurocard
EUROCARD (payment card)

HistoryEUROCARD was introduced in 1964 by a Swedish banker Wallenberg, as an alternative to American Express.In 1965, EUROCARD International N.V....
 brand for payment cards in 2002. Many Eurocards, particularly in countries like Austria
Austria

Austria , officially the Republic of Austria , is a landlocked country in Central Europe. It borders both Germany and the Czech Republic to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the west....
 and Germany
Germany

Germany , officially the Federal Republic of Germany , is a country in Central Europe. It is bordered to the north by the North Sea, Denmark, and the Baltic Sea; to the east by Poland and the Czech Republic; to the south by Austria and Switzerland; and to the west by France, Luxembourg, Belgium, and the Netherlands....
, were charge cards. Therefore, the majority of MasterCards in these countries still are charge cards. Visa charge cards are also available in Europe
Europe

Europe is, conventionally, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally divided from Asia to its east by the water divide of the Ural Mountains, the Ural , the Caspian Sea, and by the Caucasus Mountains to the southeast....
.

In 1914, Western Union
Western Union

The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is at Englewood, Colorado, and its international marketing and commercial services headquarters are in Montvale, New Jersey....
 offered the first charge card, which was printed on paper, for consumers. In 1959, American Express
American Express

American Express Company , sometimes known as "AmEx" or "Amex", is a Diversification global financial services company that is headquartered in New York City, New York....
 was the first company to issue embossed plastic charge cards.