Charge Card

A charge card is a card that provides a payment method enabling the cardholder to make purchases which are paid for by the card issuer, to whom the cardholder becomes indebted. The cardholder is obligated to repay the debt to the card issuer in full by the due date, usually on a monthly basis, or be subject to late fees and restrictions on further card use.

Though the terms charge card and credit card are sometimes used interchangeably, they are distinct protocols of financial transactions. Credit cards are revolving credit instruments that do not need to be paid in full every month. There is no late fee payable so long as the minimum payment is made at specified intervals (usually every thirty days). The balance of the account accrues interest, which may be backdated to the date of initial purchase. Charge cards are typically issued without spending limits, whereas credit cards always have a specified credit limit that the cardholder may not exceed.

Though originally charge account identification was paper-based, in 1959 American Express became the first charge card operator to issue embossed plastic cards to ISO/IEC 7810 ID-1 standard. Cards have an embossed bank card number complying with the ISO/IEC 7812 numbering standard.