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

What is the difference between a charge card and a credit card Introduction: The Evolution of Payment Methods Hello and welcome! Over the years, the way we make payments has evolved significantly. From bartering to cash, and now to plastic money, the options have expanded. Today, we'll be focusing on two popular forms of plastic money: charge cards and credit cards. Defining Charge Cards and Credit Cards While both charge cards and credit cards are used for making purchases, they differ in some fundamental ways. A charge card, as the name suggests, allows you to charge expenses to the card without any preset spending limit. On the other hand, a credit card provides you with a predetermined credit limit, which you can utilize for purchases. Payment Terms and Balances One of the key distinctions between charge cards and credit cards lies in their payment terms. With a charge card, you're typically required to pay off the entire balance at the end of each billing cycle. This ensures that you don't carry forward any debt. In contrast, a credit card allows you to carry a balance from month to month, with the option of making minimum payments. However, it's important to note that carrying a balance on a credit card can lead to interest charges.