Saturday, April 3, 2010 - 1:33 PM

Pros and Cons of a Charge Card

Charge cards are similar to credit cards but require you to pay in full every month. According to this CNNMoney.com article

Charge cards generally make sense only if you're a big spender; they tend to offer richer rewards than credit cards do

The downside is high annual fees (any annual fee is too high for me). According to the article, the annual fees of the American Express charge cards range from $25 to $450. Do you use charge cards?

KenBDG5,144 posts since
Nov 29, 2009
Rep Points: 116,996

1. Saturday, April 3, 2010 - 3:50 PM

A charge card would be perfect for many people if there isn't an annual fee. No chance for overdraft fees. No interest. Good rewards. I wonder how much annual fees really contribute to the issuer's bottom line. If they eliminate the annual fee and dial down the rewards a bit, charge cards would beat the hell out of debit cards.

Anonymous963 posts since
May 9, 2010
Rep Points: 1,953

2. Saturday, April 3, 2010 - 5:05 PM

I'm thinking the annual fee helps them make up for the lack of revenue from interest and overdrafts. I haven't noticed charge cards before so I'll have to keep a look out for these.

KenBDG5,144 posts since
Nov 29, 2009
Rep Points: 116,996

3. Sunday, April 4, 2010 - 12:03 AM

What would be the point? Why would I want to have 1% cashback card (very pedestrian reward - almost every other card offers that and there are 2% and even 5% reward cards out there), pay in full every month as I do anyway, and yet pay annual fee for the privilege? Doesn't make any sense. Maybe it makes sense for people with no credit score or bad credit.

Anonymous963 posts since
May 9, 2010
Rep Points: 1,953

4. Sunday, April 4, 2010 - 11:55 AM

AmEx charge cards have lot more priviledges beyond just charging....

Anonymous963 posts since
May 9, 2010
Rep Points: 1,953