What is a Charge Card?

A woman holding a charge card out.

If you reside in Saudi Arabia, chances are you’ve seen banks and financial institutions provide a charge credit card as an option alternative to credit cards. You will see institutes like Alrajhi Bank and American Express offer customers in Saudi Arabia the option to get either a credit card or a charge credit card.

So what is a charge card?

A charge card differs from a credit card in the sense that you have to pay the outstanding bill in the full amount at the end of the month that is on the charge card you used. As a result, it is extremely important that you carefully read your charge card statement every month.

Charge cards do not come with a preset limit, however as you will have to pay the full balance on the due date, you need to make sure you have the funds in your account. With credit cards, often people can pay the minimum balance and incur late fees for every day they do not pay the remaining balance, this is not the case with charge cards.

Charge cards have no pre-set spending limit, but this does not mean you have unlimited spending. Financial institutes are going to adjust the spending power based on your past habits, spending history, and credit record, if you pay your bill on time, and if it is in full. The institutes (at their discretion) can change your spending power.

It is all the more important to keep an eye on the amount you are charging on your charge credit card to make sure you do not go beyond your current account balance.

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