Charge card

A charge card allows you to credit your purchases on a separate account payable at the end of every month. Unlike credit cards, they do not use an extended line of credit that keeps your balances outstanding. Instead, you have to 'buy' this feature with your monthly interest. Basically, you take out a very short loan to pay your purchases for the month. If you are unable to pay your balance at the end of the period, you are charged an additional penalty interest on top of the standard interest.