There are practically endless varieties of credit cards.

What are the most important things to remember when studying and comparing the products? Knowing the basics and comparing the features of the cards should be done first. It is also important for the card holder to familiarize themselves with the types of cards available.

A common type is the Charge Card. This card is a must for spendthrifts. It allows one to purchase goods and services without the need to pay them back in instalments or in usual monthly billings. These cards also charge extra fees which is taken from the cardholder’s account in the beginning. The rest of the amount due is paid in full subsequently. These cards normally come with a very high membership fee, annual fee, and the like.

Should you choose to acquire and use one, make sure that you can pay the credit limit, read through the agreement very carefully and understand the terms of the contract. Spend only on products or services for which you are sure you will be able to pay. Don’t make purchases which you don’t have the means to pay for. Take note of the due date or schedule. If it is within your billing cycle, then you’re fine. But if it’s not, you’ll want to have sufficient funds on your own as quickly as possible.

Advantages:

  1. Purchase and pay later: The main advantage to using a charge card is that you can buy now and pay later.
  2. Debt-free purchasing: Unlike most cards, a charge card will not accrue interest as long as you are within the cycle of payments. This could be great news for those who have a hard time with high interest credit accounts and cards. An additional advantage is that you can purchase goods and services without having to pay for your bills until the very end.
  3. Build credit: Having a charge card generally means you have a strong credit score, but you can increase it further if you use it to purchase things and pay regularly.
  4. Spending Limits: Charge cards typically have high spending limits or in some cases they are unlimited, which means the card will never default on a payment.
  5. Perks: Charge cards usually come with additional perks such as, travel insurance packages, discounts on products, concierge services, reward schemes, breakdown cover, exclusive access to airport lounges, etc- for an annual fee of course.

Disadvantages:

  1. Expensive forms of payment: Some companies will charge you a fee in the form of a flat-rate or a percentage of the transactions you make. You might want to consider whether using charge cards over a credit card is more convenient. Also, be aware that cards which have monthly finance charges or annual fees can be more expensive than cards which don’t.
  2. Unsecured cards: Unsecured cards don’t hold as much power as secured cards. The card limit on an unsecured card is generally lower and there is no card protection or insurance to speak of.
  3. Late Payment Fees: If you miss payments the charges are usually more significant than regular credit cards, and if you miss even a few, the card will be cancelled.
  4. As mentioned above, make sure you can pay off the bill at the end of the month, as you can only borrow for a month- you cannot drag the payment out over a longer period of time.
  5. They are not accepted everywhere: Many High Street retail outlets do not accept charge cards as valid payment, so be aware.