Understanding the Differences Between Charge Cards and Credit Cards

Travel on Point(s) has partnered with CardRatings for our coverage of credit card products. Travel on Point(s) and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

 

American Express has begun enforcing a new rule limiting the number of cards customers may have. It appears Amex now allows only up to four credit cards, regardless of whether they are personal or business credit cards. Amex has also indicated that the limit for charge cards is 10.

With this new rule coming into effect, it’s worth understanding the differences between credit cards and charge cards, and which Amex cards fall under which category.

How are charge cards different from credit cards?

Credit cards allow you to spend up to a preset spending limit (your credit line). You are only required to make a minimum payment each month, and may carry the rest of the balance onto next month’s bill. However, doing so leads to high interest rate charges. This is why you should pay your statement balance off in full each month. Also, failure to make the minimum payment results in a late fee charge.

On the other hand, charge cards do not have a preset spending limit. However, you are required to pay your balance off in full each month. Charge cards do not offer the option to make a minimum payment. If you do not pay your statement balance off in full, the card issuer may take certain actions on your account, such as blocking any additional purchases until you pay your balance off in full, or closing your account outright.

When it comes to applications, charge cards typically require applicants to have excellent credit. Meanwhile, credit cards vary widely in the quality of credit required for approval depending on the card (think a student credit card compared to a premium travel credit card like the Chase Sapphire Reserve, for example).

Which Amex cards are charge cards and which are credit cards?

Here is a handy breakdown covering most American Express cards:

 

Credit Cards
(Limit: 4)
Charge Cards
(Limit: 10)
  • Amex EveryDay and EveryDay Preferred
  • Gold Card
  • Blue Cash Everyday and Blue Cash Preferred
  • Business Gold Card
  • Hilton cards (Hilton, Ascend, Surpass, Aspire, Business)
  • Green Card
  • Marriott (Bonvoy, Bonvoy Business, Bonvoy Brilliant)
  • Business Green Card
  • Delta cards (Blue, Gold, Platinum, Reserve, Gold Business, Platinum Business, and Reserve Business)
  • Platinum Card (including co-branded versions like Schwab and Morgan Stanley)
  • Business Platinum Card
  • Plum Card

Final Thoughts

Any limitation on the number of credits cards is always disappointing. However, Amex's new four-credit card limit is unlikely to affect many people's long-term credit card strategies when factoring in other banks' application rules. That said, those who spend on multiple Delta credit cards to earn status may be especially disappointed. Folks who already have more than four Amex credit cards are likely fine, but shouldn’t expect to be approved for any additional Amex credit cards in the future.

Do you have any data points of being approved or denied for a new Amex card recently? Join the discussion in our Facebook group!

 

Travel on Point(s) has partnered with CardRatings for our coverage of credit card products. Travel on Point(s) and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

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