AARP members get more! Browse through your member benefits.
by Sid Kirchheimer, AARP Bulletin, August 6, 2010
Q. I received a mail offer for a zero percent charge card. So what’s the catch?
A. Many folks use the terms “credit cards” and “charge cards” interchangeably, but they are different things. Unlike a credit card, a charge card must be paid in full each month.
So that zero percent rate is marketing hype—by definition all charge cards are zero percent, because there’s no balance to pay interest on. But be prepared for hefty fees and penalties if you miss your payment date. Issuers also take in money by charging annual fees and by taking a small percentage of each purchase.
Charge cards don’t have preset spending limits. Rather, your levels are set by the issuer based on spending and payment history. The cards also typically provide generous rewards, such as one point for each dollar spent and two or three points in certain categories. Some also provide travel discount and insurance benefits.
Annual fees can be steep. For instance, American Express, the leader in this niche, charges $450 a year for its multi-benefit Platinum charge card (but only $25 annually for its new Zync charge card).
Charge cards are usually issued to people with the best credit scores and credit histories, and if you’re among them, expect more solicitations. Money magazine reports that banks have tripled the number of mailed offers for charge cards in recent years, and more lenders are expected to begin offering them.
Sid Kirchheimer writes about consumer and health issues.
Please leave your comment below.
You must be logged in to leave a comment.
Get tips and resources to protect yourself from fraud and see the latest scam alerts in your state.
Members save 15% on in-store purchases of frozen yogurt, treats and apparel.
Exclusive program for members from The Hartford.
AARP members receive exclusive member benefits & affect social change.
You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits.
Your email address is now confirmed.
Manage your email preferences and tell us which topics interest you so that we can prioritize the information you receive.
Explore all that AARP has to offer.
In the next 24 hours, you will receive an email to confirm your subscription to receive emails
related to AARP volunteering. Once you confirm that subscription, you will regularly
receive communications related to AARP volunteering. In the meantime, please feel free
to search for ways to make a difference in your community at