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

An American Express charge card has no preset spending limit, and its balance needs to be paid in full on a monthly basis.

An Amerian Express credit card comes with a credit limit, and you're allowed to carry a balance on the card and pay it off over time with interest (but you shouldn't!)

Most financial institutions in Canada offer credit cards, which are financial products that allow you to borrow up to a certain credit limit. You then have the option of paying off the balance in full every month, or paying it off over time (“carrying a balance”) while paying interest. You should avoid the latter option at all costs, because the interest you pay will more than offset any rewards you earn from using a credit card.

Meanwhile, American Express is one of the few issuers to offer charge cards, which come with no preset spending limit and therefore require full payments every month. If you don’t make the full payment every month on charge cards, you get hit with late fees, whereas credit cards will absolve you of any late fees as long as you make a small minimum payment each month.

Within the American Express ecosystem, the more “premium” products tend to be charge cards, including the Gold Rewards Card, the Business Gold Card, the Platinum Card, and the Business Platinum Card.

Meanwhile, the American Express credit cards include the SPG Card, the Business SPG Card, and the Cobalt Card.

In the past there was a limit of two credit cards per customer, although since the introduction of the Cobalt Card, this limit has been relaxed. There is no limit to how many charge cards you can hold.

Last updated 17 November 2018. Any questions?
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