Credit cards and charge cards are used interchangeably, but there is a very importance difference between the two. A charge card is an alternate payment to cash, and unlike credit cards, charge cards do not keep their billing pending from one cycle to the next. Rather the cash you have used on the charge card has to be repaid back in full amount, by the due date, or else there will be late fees and possible blocking of card.
Before you would be facing drastic court consequences for not paying your charge cards, you should clearly know what charge cards really are. For the first thing, do not confuse them with credit cards.
You can get away with credit card late payment, only with increase in interest, however, you cannot get away from charge card repayment. Second, you will need to know and understand about the fee and costs that comes along with the charge card.
The fees associated with a charge card will generally involve an annual fee, an additional fee to add a cardholder to the account, additional charges if used for cash purposes, penalty fees when you don’t pay charge cards. The late fee that is charged could range from $20 to $40 per charge along with being reported to the credit bureau, which would impose a bad credit rating in your credit history. Considering all these fees and the penalties, which usually is the percentage of the actual charge, you would have to make your mind, when you want to get the charge card.
Though charge cards are good, they are a little restricted, hence they also have the capability to keep users responsible by demanding for the money after the due date. There are some disadvantages to charge cards, which you must know beforehand. It’s hard to get hold on a charge card, if you are an average income person, as usually it is meant only for people who have high credit rating and who can afford to pay the money back within due time. In actual these people use this card in place of their already available cash.
One way to handle due payment is through the checking account of another bank account. But this is usually in the case when you use the card for regular payments such as bills etc, where you know, you will finally have the money to repay in due time. Other than that, you can call the charge company and ask to change the billing date, provided you have never been late before and are a good creditor. Through proper planning and controlled use of the card, you will avoid late charges and hence enjoy other privileges.
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