Which is right for you?
TLDR: You *can’t* carry a balance on a charge card.
Credit Cards
Credit cards are a staple in most people’s wallets. They are great for making large purchases, and they are great for getting people into debt. The average credit card has a limit to how much you can buy with it. It also has an interest rate, a monthly payment requirement, and it allows you to carry a balance from month to month. Depending on your credit history, the credit limit is usually anywhere from $500-$50,000.
Credit cards usually offer an incentive if you are approved for the card. Cash back cards, for example, will offer a one time bonus where you get $250 off your balance if you spend $3000 in 3 months. Additionally, you might earn $.01 on every dollar you spend. Mentally, this can make you feel like you are getting a good deal, and as long as your card is paid off every month, it is a good* deal.
*It's a good deal because you are getting a little extra money back. In terms of credit card offerings, this is a undesirable return.
Charge Cards
Charge cards are very similar to a credit card, except you are expected to pay them off in whole every month. Think American Express cards. Now, most charge cards offer plans so you can pay purchases off over time, but like a credit card, they charge interest on this option. I hold several different Amex cards, and none of them have a spending limit, and now they all offer options to pay over time.
There are a lot of good internet calculators to help you decide which card is right for you. If you plan on paying everything off each month, both credit cards and charge cards can add a lot of value to your wallet. Make sure you are a getting a card that will give you maximum rewards on the places you spend the most money. Cash back cards are great for people who want rewards with minimal hassle. Reward points are valuable for people willing to spend extra time on on how to get the most value back from points. If you plan on cashing points out for gift cards, you are probably better off with a cash back card.