Charge cards are credit cards that require you to pay off your balance in full every month. Because charge card balances are not loans, charge cards do not carry an interest expense. There is, however, a late payment fee in case you fail to pay off you balance on time. American Express charge cards offer a membership rewards program including insurance benefits, hotel and travel rewards, and a loyalty program. Some charge cards may also allow you to pay off your balance over a longer period.

If you use a charge card without a limit as an alternative to using a credit card, you may see your credit score decline. This is because in place of a credit card’s limit, the credit bureau will often use the highest balance reached on your charge card to calculate your debt to available credit ratio. Thus, your used credit ratio may appear artificially high. Thirty percent of your Fico score, for example, is affected by the amount of money you owe.