How to Pay a Charge Card Bill

Charge cards operate differently than credit cards when it comes to billing and payment. With a credit card, you can carry a balance from month to month, accruing interest charges on the unpaid balance. But charge cards require you to pay off the full balance by the due date each billing cycle. Not paying in full can lead to account suspension or closure.

So what exactly is a charge card, and how do you properly pay the bill to avoid issues? Here, we’ll explain key differences between charge cards and credit cards, detail the payment requirements for charge cards, and provide tips for managing your account.

Charge Card vs Credit Card

While they may seem similar, there are some important distinctions between charge cards and credit cards:

• Paying the balance – Credit cards allow you to carry a balance, charge cards require you to pay in full each billing period.

• Interest charges – Credit cards charge interest on balances carried over Charge cards do not have interest charges

• Credit limits – Credit cards have a set credit limit. Charge cards have no preset spending limit.

• Building credit – Only credit cards report to the credit bureaus and help build your credit score. Charge cards do not affect your credit score.

• Fees – Both charge cards and credit cards can have annual fees, foreign transaction fees, etc. Late fees typically only apply to credit cards.

How Paying the Charge Card Bill Works

Paying off your charge card works as follows:

• Each month you’ll receive a statement detailing your charge card purchases and fees for the billing period,

• The full statement balance must be paid by the due date, typically around 3 weeks after the closing date.

• If you don’t pay the full amount due by the due date, you will incur a late fee, usually around $25-40.

• If you routinely fail to pay your balance in full, the card issuer can suspend or even cancel your account.

• Since no balances carry over, there is no interest charged on charge cards. You simply pay your charges in full each month.

• You can pay your bill by check, online, phone, automatic payments, etc. Ensure it arrives by the due date.

• Be cautious of overspending if your charge card has no preset limit. You still must pay the full balance each month.

Tips for Managing Your Charge Card Account

To properly handle payment of your charge card bill, here are some tips:

• Carefully review statements to check for errors and monitor your spending. Report any issues right away.

• Mark your calendar with each billing cycle closing date and payment due date so you remember to pay on time. Set payment reminders.

• Don’t wait until the due date in case of mail delays or processing issues. Pay several days early.

• Enroll in autopay from your bank account to ensure on-time payment if you occasionally forget. Just monitor each statement.

• Know your account benefits and fees to avoid unwanted charges. Some benefits like travel insurance may require specific payment methods.

• If your charge card has no preset limit, be very careful about overspending and take steps to avoid it.

• If you can’t pay in full one month due to unusual circumstances, contact the issuer before the due date to discuss options.

• Always pay by the due date to avoid late fees or account suspension. Charge cards have little tolerance for late payments.

The Bottom Line

The key thing to remember with charge cards is that you must pay the full statement balance by the due date each month. Charge cards do not allow carrying a balance like credit cards. By closely monitoring your charges, paying attention to due dates, paying on time, and utilizing autopay when possible, you can successfully manage your charge card account and avoid costly late fees or account issues. Paying your bill fully and on time takes more diligence with a charge card compared to a credit card.