Compare charge cards

Overview

You don’t see charge cards much anymore. Today, one of the only major providers still offering them is American Express, while other issuers stick to credit cards. But charge cards haven’t died off yet. In fact, there are still a few excellent ones out there.

The benefits of charge cards include flexibility over payments (purchases at the start of the billing cycle are paid for at the end of the billing cycle) and in some cases, rewards on your spending. Charge cards normally come with a monthly or annual fee attached, though don’t offer purchase protection under section 75 of the Consumer Credit Act.

How do charge cards work?

Charge cards have no set spending limit and require you to pay your full balance off by the statement due date, which is usually the end of the month. This is different to credit cards, where you only have to repay a small portion, usually about 2–4% of the entire balance each month. As such, a charge card is not a revolving line of credit and does not come with an interest rate. Instead, you’ll be charged a late fee if you fail to make the full repayment on time. The structure and payment requirements of charge cards also means they tend to have higher minimum income and credit history requirements than most credit cards.

Charge cards often come with a range of benefits such as membership rewards, travel insurance, airport lounge access and concierge services. They also usually have high annual fees and are targeted towards high-income businesses. For example, the American Express Business Platinum Card costs £650 per year.

Charge cards vs credit cards

What types of charge cards are out there?

• Rewards charge cards. If you want to get something back for using your charge card, a rewards charge card could be right for you. As well as earning reward points for every pound you spend on eligible purchases, these cards offer other perks such as airport lounge access, complimentary insurance and concierge services. Please note these premium features often come at the cost of a high annual fee.
• Gold and platinum charge cards. Gold and platinum charge cards are designed to suit big spenders looking for premium perks. Depending on the card, you could get luxury rewards including fine dining, 5-star hotels and elite travel benefits. You’ll also receive higher protection in the form of high complimentary insurance covers and platinum concierge services. These cards usually come with higher fees and are best suited to high income earners.
• Business and corporate charge cards. The type of card you choose should largely depend on the type of business you own. Business charge cards cater for small businesses whereas corporate charge cards cater for larger corporations. Similar to personal charge cards, business charge cards also come with rewards programmes, travel insurance and concierge access. Corporate charge cards may include features for tracking company and travel expenses, while also offering a degree of flexibility and control over those expenses.

How to compare charge cards

Make sure you consider the following factors when comparing charge cards to find the right option for you.

• Annual/monthly fee. This is an ongoing fee for maintaining your account. If the fee for this type of card is very high, make sure it’s offset by rewards and perks you’ll really benefit from. For instance, if you rarely travel, it probably wouldn’t be worthwhile paying a high annual fee for a charge card offering premium travel advantages like airport lounge access and comprehensive travel insurance.
• Rewards. A card with a good rewards programme and high points earning potential can be a great way for you to profit from your expenses. Rewards programmes vary from card to card, so it’s important to make sure the card you choose allows you to earn and redeem rewards you want, such as gift cards, frequent flyer points and hotel stays. Try to estimate how much you’ll spend on the card each month, to ensure the benefits of the card outweigh the costs.
• Minimum income requirements. The minimum income requirement varies between charge cards, with premium cards requiring a higher annual income than others. Check income requirements for charge cards you’re considering to find one suited to your current income level.
• International transaction fee. This is the fee applied to any international transactions made on your charge card, whether you’re shopping online or overseas.
• Billing period. This will determine when you have to pay off your charge card balance. Make sure you check the terms and conditions for your card so you can spend and budget accordingly.

How to apply for a charge card

Applying for a charge card is simple and can be done online in a few minutes. The eligibility requirements vary from card to card, but some of the general criteria include:

• Age. The age requirement is generally at least 18 years old.
• Residency. You’ll need to be a UK resident.
• Annual income. Different cards will require different income levels.
• Credit history. Most charge cards require you to have a high credit rating and no history of bad debt or payment defaults.

If you’re applying for a business charge card, there might be some additional criteria. Such as:

• Annual turnover The provider tends to want to see recent accounts.
• Location. In most cases, you’ll need to be a UK-based business.
• Years trading. Some providers have a required years trading.

Charge card disadvantages

Remember that the full balance on your charge card needs to be cleared every month, and you won’t have purchase protection under section 75 of the Consumer Credit Act. With an unspecified spending limit, you could easily overspend on a charge card and find yourself unable to repay your balance. This could lead to late fees, additional charges and even impact your credit history.

If you’re looking to borrow over an extended period of time, you may wish to consider a 0% purchase credit card instead.

Frequently asked questions

• How much can I actually charge to a charge card?

  People have been known to pay for yachts and supercars on their charge cards. However, charge cards are not always limitless and purchases are approved or disapproved based on factors such as established spending patterns, credit ratings, repayment history and declared financial resources. As you establish a relationship with your charge card provider, the amount chargeable to your card should increase.

• Can I get supplementary charge cards for my family or employees?

  This is usually possible as long as the nominated individual satisfies the card provider’s requirements. You, as the main cardholder, will be completely liable for all supplementary card spending.

Written by

Chris Lilly

Head of publishing

Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio

Chris's expertise

Chris has written 602 Finder guides across topics including:

• Loans & credit cards
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