Charge cards offer flexible spending, but you can’t carry a balance
American Express offers charge cards in Australia. These cards let you spend money like a credit card, but unlike a credit card you have to repay everything you spend each month.
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Key takeaways
With a charge card there's no interest and usually no pre-set limits on your spending. They are suited to big spenders and business customers.
But you can't carry a balance with a charge card. You have to repay the full amount you spend each statement period. Otherwise you get hit with late payment fees.
Most charge cards in Australia are offered by American Express, which isn't accepted everywhere.
Charge cards are functionally very similar to credit cards. But the main thing is you have to repay your card spending at the end of the statement period. This is very different to a credit card where you can takes months or years to pay off your spending while getting charged interest.
Charge cards are else flexible in this sense, but they're designed for bigger spenders and corporate customers. So they often let you spend more than you could with a credit card, and have no set limits like a credit card.
No pre-set spending limit
American Express issues charge cards in Australia. According to its website, charge cards have " no pre-set spending limit". It goes on to explain that in practice this means your spending power is dynamic and is determined by "your transaction patterns, your personal credit rating and other factors."
Charge cards vs credit cards
Charge cards
Card balance. Must be paid in full by the statement due date (e.g. each month). You can't carry a balance.
Interest. There are no interest charges.
Late payment fees. If you don't pay your card balance you get hit with late payment fees. This is usually a percentage of your outstanding balance.
Credit limits. Most charge cards have no pre-set limits. Some vary each month based on your spending and other factors.
Income requirements. Charge cards have higher minimum income requirements that credit cards. You'll need to earn at least $75,000 a year.
Credit cards
Card balance. You don't have to repay everything you spend each month, as long as you pay the minimum. But you get charged interest.
Interest. Credit cards charge interest (between 8% and 24%) on your unpaid balance.
Credit limits. When you're approved for a credit card you also get a set credit limit. You can't spend more than this amount.
Income requirements. Depending on the card, you can get approved with an income as low as $30,000. Cards that offer points and other perks usually have income requirements around $75,000.
Because American Express is the main provider of charge cards in Australia, if you're looking for a rewards charge card you'll be earning Amex Membership Rewards Points.
Bottom line?
Charge cards and credit cards both offer lines of credit, as well as similar rewards and perks. But you won't pay interest on a charge card and need to pay it off completely each time you get a statement.
There is also a limited number of charge cards on the market in Australia. There are only 11 of these cards in Finder's database (versus well over 200 credit cards).
What does "no pre-set spending limit" mean?
Most charge cards don't have set credit limits that you need to stick to when you use them. Instead, purchases are approved based on factors including your spending patterns, credit score, repayment history and financial information that's available to the provider.
So, as you build up spending and payment history on a charge card, the amount you can spend may also increase, without the need to apply for a credit limit increase.
Types of charge cards in Australia
Business and corporate charge cards are more common than personal charge cards in Australia. These cards come in 3 main categories.
Rewards and frequent flyer cards
The range of charge cards in Australia includes accounts linked to American Express Membership Rewards, Qantas Business Rewards and Velocity Frequent Flyer. Keep in mind that Qantas Business Rewards is currently only available for business or corporate accounts.
Gold and platinum cards
Gold and platinum charge cards are suited for big spenders and high-income earners who want premium perks. This can include travel credit, airport lounge access, complimentary hotel loyalty status and fine dining offers. These cards also usually have higher fees than more basic charge cards.
Business and corporate charge cards
The flexibility of no pre-set spending limit is a key benefit of a charge card for business expenses, although providers typically have safeguards to prevent high-risk spending. These cards also offer other features for managing business and corporate spending, such as:
Additional cards for employees
Customisable account controls
Complimentary insurance
Detailed and itemised statements
Summaries for GST (goods and services tax) and FBT (fringe benefits tax)
Integration with accounting software (e.g. MYOB, Microsoft Excel)
Can you repay your spending in full each month? You need to pay the total amount spent on a charge card by the due date on each statement. So if you don't think you'll be able to repay the account every 31-55 days, look at credit cards instead.
Do you want rewards and perks? Rewards points, lounge access, travel credit and other perks offered by charge cards can help you justify the annual fee. But you should consider how often you'll use these features to make sure it works for you.
Are you eligible? Charge cards typically have high income requirements and other eligibility criteria. As most of them are designed for business spending, you may also need to have an Australian Business Number (ABN) and business turnover details.
Can you afford the annual fee? Charge card annual fees typically range from around $40 to $1,750. Some business cards also have additional cardholder fees.
Frequently asked questions
High penalty fees may apply if you don't pay the full amount listed on your charge card's statement by the due date. The late payment details will also be added to your credit report, which could lower your credit score.
Depending on the charge card, there may also be other restrictions such as limiting how much you can spend. So if you don't think you'll be able to make a payment by the due date, contact the charge card company as soon as possible to discuss your options.
It depends on the card but you can usually get additional cards for employees with a business charge card. Some personal cards also offer additional cards for family members.
Keep in mind that any additional cardholders will need to meet the eligibility requirements. If it's a personal charge card, you will also be the only one legally responsible for managing the account. For business cards, you'll need to check the liability.
Yes. Even though charge cards aren't technically "credit cards", applying for one will leave an inquiry on your credit report. Repayment history will also be reported to credit bureaus, so they can help you build your credit history.
Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University.
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