Charge cards – Use credit without impacting your score!

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In this new millennium, a person who does not use credit cards for shopping and paying utility bills is considered as less financially savvy consumer. I know, the above statement sounds a bit naive; but that’s how I feel when my colleagues stare at me with disbelief asking, “Tu credit card use nahi karta??” [Don’t you use credit cards?]

Yeah, I usually set out with cash when I wish to go for shopping; but for paying my utility bills – I prefer the easier Net Banking way to it. However, for those of you who use multiple plastic cards cluttered in your fat leather wallet, there is good news for you!

Once you’re familiar with the concept of all-new ‘Charge cards’, you might just want to dump your debit and credit cards; and replace them with a variant which is more intelligent and provides unique value proposition in terms of managing and maximizing your cash flow with controlled spending patterns.

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Image: American Express

What is a Charge Card?

This valuable card not only provides a greater control over your finances, but also simplifies year-end financial planning by tracking your spending. Unlike credit cards, they allow you more purchasing power with no pre-set spending limits; but you must repay your full balance at the end of each month without revolving your credit balance.

These unique plastic card is called ‘Charge card’; but effectively, they don’t have any charges or interest rate as it involves regularly paying your credit balance at the end of the month. Whereas in credit cards, interest rate is the prime consideration which influences your limit on the credit card.

How does Charge card work?

A charge card has an in-built intelligence that recognizes your spending needs and adjusts accordingly based on the historical data of your income, spending profile, credit history, monthly repayment record, etc. It’s a variant of the credit card where you use credit but don’t want to impact your credit score as you can not run up any debt using this card.

In short, it becomes a mirror of your spending profile and trend. Though, there is no static spending limit like a credit card or minimum bank balance requirement as in case of a debit card; a charge card constantly determines a check on the consumer profile and promotes spending within their comfort zone.

That’s not all! A charge card often comes bundled with a number of discount schemes, extended warranties on certain purchases, travel accident insurance, reward points and other linked benefits which might just appeal you to shift to its high quality premium experience.

Do you feel this uniquely-featured plastic card can take-off big time in India?

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