Charge Cards vs. Credit Cards

[boosami]

In the US, there seem to only be two major charge card options--American Express and Diner's Club (now owned by Discover). Overseas, there are many more offerings for true charge cards including MasterCard/Maestro, Visa, Eurocard, and others.

Does anyone know of any other charge cards available in the US other than AMEX and DC? Why are charge cards more popular in Europe than here? Just wondering...

By charge cards of course I mean cards that the terms require you to pay off the entire balance each billing period.

[sweeps]

Charge cards aren't as popular because CC companies don't make money on interest charges.

[boosami]

And European CC companies differ how?

[wblake]

Charge cards aren't as popular because CC companies don't make money on interest charges.

They're also not as popular with consumers since you have to pay them off every month . North American attitudes towards debt and credit are different than many other places, which could be part of the reason there are more options in Europe, for example.

Amex and Diners Club are the only two charge cards I'm aware of in the US. You could reverse the process though and use a prepaid credit card. It doesn't give you quite the same freedom, but it serves essentially the same purpose - no credit card balance. You just have to pay before purchasing instead of after.

[Fern]

Visa and MC are available in the US.

[MiikeB]

What is the advantage over credit cards? I do not pay any fees/interest with my credit card as long as I pay it off every month, I get rewards and god forbid something happens where I have to carry a balance for whatever reason I have that option.

[kork13]

Fairly unrelated, but I was hoping maybe some of our international posters could answer a question.... How does credit work in other countries, such as in Europe or Asia? Is there anything similar to our credit bureaus in other countries that track and report the credit worthiness of individuals? Or does it operate primarily on a line of credit system with individual banks? Any explanation would be appreciated, I'm just curious... thanks!

[boosami]

Experian and the other US Credit Bureaus have presenses overseas (I know they exist in the UK), though the overall "credit score" is significantly different than our FICO. Other countries may have their own types of credit reporting agencies and scoring.

I do know that credit information is not shared between countries. If you move to the UK and request your Experian report, it will not have any of your US credit information on it and vice versa, despite it being the same credit reporting company.

[kork13]

What is the advantage over credit cards? I do not pay any fees/interest with my credit card as long as I pay it off every month, I get rewards and god forbid something happens where I have to carry a balance for whatever reason I have that option.

MiikeB asked this earlier, but never got a response, and I was actually curious as well about the differances and advantages of either one...

[boosami]

My charge cards have no pre-set limit, so I don't have to worry about limitations. That means I can put a $60,000 downpayment on my card, get the points for it, and pay it off immediately. I use them for daily spending and also for paying my taxes and other big ticket expenses. You can get credit cards that have "no pre-set limit" also, but they really have a cap on the high spending--my Visa Signature SAYS it has no limit but there is still an amount I am not allowed to go above without overlimit fees.

As far as benefits, my Diners Club (charge) offers similar and slightly better benefits as my Amex (charge) and my Visa Signature elite (credit). What stands out though is the customer service. The DC has virtually no hold time for concierge service and other telephone services. There is a smaller user base for charge cards, and Amex and DC both have separate telephone numbers and staff for taking care of charge card customers, so it seems to me to be faster and more personalized.

As far as I'm concerned, charge cards and credit cards have completely different purposes. Charge cards give me flexibility of 30-60 days to pay off the balance with money I ALREADY have, and credit cards are for extending credit for money I DON'T have.

[albertknowles09]

Charge Cards vs. Credit Cards

hey,
its good to have credit cards but i am not the credit card user so cant tell you much about it.

[markusk]

My charge cards have no pre-set limit, so I don't have to worry about limitations. That means I can put a $60,000 downpayment on my card, get the points for it, and pay it off immediately. I use them for daily spending and also for paying my taxes and other big ticket expenses. You can get credit cards that have "no pre-set limit" also, but they really have a cap on the high spending--my Visa Signature SAYS it has no limit but there is still an amount I am not allowed to go above without overlimit fees.

As far as benefits, my Diners Club (charge) offers similar and slightly better benefits as my Amex (charge) and my Visa Signature elite (credit). What stands out though is the customer service. The DC has virtually no hold time for concierge service and other telephone services. There is a smaller user base for charge cards, and Amex and DC both have separate telephone numbers and staff for taking care of charge card customers, so it seems to me to be faster and more personalized.

As far as I'm concerned, charge cards and credit cards have completely different purposes. Charge cards give me flexibility of 30-60 days to pay off the balance with money I ALREADY have, and credit cards are for extending credit for money I DON'T have.

That's an important difference that I knew about, but never really appreciated until last year.

We have 2 cards, Chase Mastercard and Citi Visa. The credit limit on the MC and VISA were 10K each. Anyway we always pay off the cards each month so never thought about the limit because we never needed it....

Until last year when we bought a house, and so of course we needed to get new stuff: New carpet 7K, high-end custom work for the mastercloset and 2 other closets, 15K (yes, it was a splurge, but worth every cent!), furniture 8K. We had the money in the bank but wanted to use our credit cards for the cash back. When I called Citibank and Chase to increase our credit limit, they both turned us down. Even with my gross salary of well over 200K.

In the end, we had to break down the payments into chunks of over a 4 month period last summer and immediately paid off the cards.

About 3 months ago, Citi Visa actually decreased our limit down to $7,500 (from 10K) because our actual use is below the approved limit. I never called them to complain -- I just don't use Citi Visa anymore. Then about 2 months ago we got a pre-approved application from Visa Black Card. Go figure. We turned it down since we did not need another card.

Recently got a Costco Amex which we use only for Costco purchases. Not sure if this is a charge or a credit card. Only thing I don't like about Costco Amex is the cash back is only redeemable at Costco stores.

Anyway, this was off the OP topic.

Not sure why we don't have more charge card options vs other parts of the world. But I think wblake is most likely right. Charge cards are not as popular with consumers in the US since you have to pay them off every month. Hence the economic mess in which we currently find ourselves.

[boosami]

Recently got a Costco Amex which we use only for Costco purchases. Not sure if this is a charge or a credit card. Only thing I don't like about Costco Amex is the cash back is only redeemable at Costco stores.

This is a credit card, not a charge card. You can carry a balance month to month on the Costco Amex.

[snafu]

Canada: nearly identical to USA; more stringent eligibility requirements, tend to take on less debt than Americans, w-aay more conservative which is evident by the bank ratings in the international mkt.

Europe: Don't trust CC, % of users of charge cards quite low. They are good money managers/savers and keep up-to-date on international currencies which play a role in their lives.

Japan: Savers, credit not popular, even for mortgages. Lg. purchases are arranged via family group similar to family trust.

China: No Credit cards, debit cards gaining popularity by middle class in lg. stores. Nearly total cash society so no record keeping, bookkeeping corrupt to avoid taxes and government control. The Communist government is the silent partner of every business, Party captains take a cut to keep it on the sweet side. there are more laws that can be imagined but no system in place to carry them out.

If the genuine government can prove corruption, the Party Captains or community 'Leaders involved will disappear...the family will likely be shot. Trials are announced after the fact, after the sentence has been carried out. There is not procedures for appeals. It's quite brutal but they say necessary to manage 1.3 Billion people, 20% of the world's population.