Primarily aimed at high income earners, charge cards are similar to credit cards but with added perks and strict repayment plans
American Express is one of the best known providers of charge cards in the UK, but some banks also issue them.
They are primarily aimed at high income earners and for businesses charging the company account.
They work in a similar fashion to credit cards but there are still some things worth knowing first.
What is a charge card?
Charge cards are much like credit cards – they allow you to pay for goods and services on credit, but with a charge card you must pay off your balance in full at the end of the month.
Although you don’t pay interest on any money you borrow with a charge card, you will have to pay an annual fee for the card.
What are the advantages of charge cards?
One advantage of charge cards is that they often have no spending limit, making them very convenient if you are a high spender or ever have to make expensive purchases on your credit card.
Many charge cards also come with discount or reward schemes and other perks, like concierge services, travel insurance, breakdown cover or even access to exclusive airport lounges.
Depending on how much you use your charge card and the kind of rewards and extras included, you could find that they end up being worth the same as or even more than the card fee.
What are the disadvantages of charge cards?
A disadvantage to charge cards in the UK is that they are not suitable for borrowing over a longer period, because your balance must be paid in full at the end of each month. If you don’t pay your charge card balance in full, you will have to pay late payment charges.
Charges cards are often subject to stricter acceptance criteria than other credit cards – for example there may be a minimum salary requirement and you will probably have to have a very good credit rating to get one.
The American Express Platinum charge card
The American Express Platinum charge card has an annual charge of £450 – which might seem high, but the card comes with some very appealing added extras that could be worth the fee.
You get access to a concierge service which you can use for everything from booking flights, tickets, hotels, restaurants and holidays to arranging conference facilities and even buying and delivering gifts for you.
You also get access to exclusive airport lounges and upgrades, comprehensive travel insurance for you and your family and a rewards scheme which means you can earn points on all your spending.
American Express Gold charge card
The American Express Gold charge card has an annual charge of £125 (free in your first year) and is great for travel benefits.
With the Membership Rewards scheme you earn one point for almost every pound you spend, and double points on your travel spend.
As a first year bonus, you also earn double Membership Rewards points on your supermarket shopping and petrol.
You can redeem your points with companies including British Airways, Hertz, Hilton, Radisson and Virgin Atlantic.
You also get Travel Inconvenience Benefit, Travel Accident Benefit, access to exclusive upgrades and a dedicated travel team who can help you plan, arrange and book your trip. Find out more and apply now.
A charge card may not be for you if you have no need for these benefits and it’s worth looking beyond the high annual fees to see what you really get for your money.