Is It Easier to Be Approved for a Charge Card Than a Credit Card?
- Credit cards are easier to get than charge cards, but may not come with the types of perks or rewards typically associated with charge cards. On a credit card, you may maintain a revolving balance and make minimum payments each month, if you choose. Credit cards also have set spending limits, which set the utilization ratio for your credit report.
- Charge cards are difficult to get because they offer a very high or no credit limit, along with generous rewards. You must prove that you can pay off the balance of the charge card each month by demonstrating that you have excellent credit and sufficient income. Since you have to pay off a charge card monthly, you don't run the risk of sinking deeper into debt as you might with a credit card.
- Charge cards are beneficial for business expenses because of their high or non-existent credit limits. Therefore, if you have to do a lot of shopping for supplies, you won't be limited by a $3,000 credit limit if you have a $50,000 budget from your client. However, it's vital that you have the money to pay off the charge card each month or you'll face hefty fees.
- Just because a credit card is easier to obtain doesn't mean it's the better choice if you have the option between a credit card and a charge card. Because you must pay off the balance on charge cards each month, they usually promote more responsible use of credit. This leads to better credit scores and less overall debt. On a credit card, however, you pay interest each month on the balance, which means you may end up paying exponentially more for your purchases than what you intended.
