What is a charge card?

How does a charge card work?

A charge card is a payment card issued on the basis that the statement balance will be settled in full when it falls due. The holder does not carry part of the balance into the next month and pay interest on it, which is the mechanism that defines a credit card. In everyday use a charge card is therefore a spending and rewards tool rather than a borrowing tool: it suits travel and routine purchases the holder can clear within the statement period, and what the holder gets from it is usually points, protections and status benefits rather than a credit facility.

Issuers also describe spending limits differently for the two products. On its United States consumer page for the Gold Card, American Express answers the question of whether the card has a credit limit by pointing to No Preset Spending Limit, described as a feature that lets the holder unlock more purchase power as the card is used. The page says the amount that can be spent is flexible and, unlike a traditional credit card with a set limit, adapts based on factors such as purchase, payment and credit history. [5] The United States consumer Platinum Card page gives the same account of No Preset Spending Limit for the Platinum Card. [6]

What does No Preset Spending Limit mean?

No Preset Spending Limit means the account does not carry a published ceiling of the kind printed on a standard credit card. Both American Express consumer pages frame this as flexibility rather than as an absence of controls: the amount available adapts as the account is used and repaid. [5] [6]

The same pages set out the catch. American Express says that in certain instances it may assign a specific spending limit to a Card Member's account, and it lists possible reasons: credit score, past due payments with American Express or other creditors, and high balances on revolving credit accounts. [5] [6] If a Preset Spending Limit is placed on an account, the issuer says it will notify the Card Member, tell them why, and explain how the limit affects how much they can spend. [5] [6]

For a points collector the practical reading is that the amount available to spend is not a fixed number to plan around, but an assessment that moves with the account's purchase, payment and credit history. [5] [6]

How is the balance treated compared with a credit card?

The clearest difference appears on the statement. With a credit card, the issuer extends a line of credit, the holder may repay only part of the statement balance, and interest is charged on whatever is carried forward. With a charge card, the expectation is that the statement is cleared in full, so there is no carried balance to price.

Balance treatment can nonetheless be mixed into a single product. On the American Express United States business card directory, the Business Green Rewards Card is listed with the line "Pay Over Time with Interest" and the explanation that eligible charges will be automatically added to a Pay Over Time balance. [7] The Graphite Business Cash Unlimited Card carries the same "Pay Over Time with Interest" line on the same directory. [7] In both listings the feature turns spending into a balance repaid over time with interest, which is the behaviour normally associated with a credit card rather than a charge card.

What are the limits of a charge card?

• A preset limit can be applied. American Express says it may assign a specific spending limit to an account and will notify the Card Member with the reason and the effect on how much can be spent. [5] [6]
• Rewards are set per card, not per card type. The United States Gold Card page lists 4X Membership Rewards points at restaurants worldwide on up to $50,000 in purchases per calendar year, then 1X, and 3X points on flights booked directly with airlines or through American Express Travel; the Platinum Card page lists 5X points on flights booked directly with airlines or through American Express Travel, on up to $500,000 on those purchases per calendar year. [5] [6]
• Fees, credits and eligibility are product terms. Two cards can share the same balance structure and still differ on annual fee, statement credits and application rules, so those terms sit on the individual card pages, including the American Express UK Gold Card and Platinum Card pages.

Frequently asked questions

Is a charge card the same as a credit card?

No. A credit card lets the holder carry part of the statement balance forward and charges interest on it, while a charge card is designed to be settled in full each statement. Issuers also describe limits differently: American Express presents its United States consumer Gold Card and Platinum Card as having No Preset Spending Limit rather than a set credit limit. [5] [6]

Does No Preset Spending Limit mean there is no limit at all?

No. American Express says it may assign a specific spending limit to an account, and that it will notify the Card Member, explain why, and explain how the limit affects how much they can spend. [5] [6]

Why might a spending limit be placed on an account?

American Express lists credit score, past due payments with American Express or other creditors, and high balances on revolving credit accounts among the factors that can lead to a specific spending limit being assigned. [5] [6]

Can a card with No Preset Spending Limit still earn points?

Yes. The United States Gold Card page lists 4X Membership Rewards points at restaurants worldwide on up to $50,000 in purchases per calendar year, and the Platinum Card page lists 5X points on flights booked directly with airlines or through American Express Travel on up to $500,000 on those purchases per calendar year. [5] [6]

Related pages

Terms: credit card points and the full glossary of frequent flyer terms. Programmes and cards: American Express Membership Rewards (UK), American Express UK Gold Card, American Express UK Platinum Card.

Sources

Sources accessed on 18 October 2026. The card pages used are American Express's United States consumer Gold Card page, its United States consumer Platinum Card page and its United States business credit card directory. Other issuers, and American Express card terms for the United Kingdom, are not covered here; UK card terms are set out on the Gold Card and Platinum Card pages.

5. American Express Gold Card, United States consumer card page, checked 18 October 2026
6. American Express Platinum Card, United States consumer card page, checked 18 October 2026
7. American Express business credit cards directory, United States, checked 18 October 2026