Card Basics

Credit and charge cards come in a variety of categories to fit almost all purchasing needs. There are consumer cards, business cards and corporate travel cards. Each type offers a different combination of financial controls, features, options and perks.

What they have in common are convenience and flexibility to buy now and pay later, either in full each month or over several months. All cards also come with the responsibility to pay back what you spend according to the cardholder’s agreement.

Charge Cards
Charge cards are a type of credit card that require you to pay the full amount you’ve charged each month. There are no periodic finance charges, and charge cards often come with rewards.

Credit Cards
Credit cards offer a revolving line of credit, meaning that consumers may carry a balance from month to month rather than having to pay the balance in full every month. Each time you use a credit card, you are essentially taking out a loan, and card issuers require that a payment of at least the minimum amount due must be paid by the due date every month. Interest charges typically accrue on amounts charged.

Rewards Cards
Rewards cards come in the form of credit and charge cards and offer consumers extra value for purchases. Rewards include cash rebates, merchandise, airline tickets, hotel stays, and gasoline and gift cards. The way rewards are earned and redeemed varies by product.

• General rewards cards usually earn one or more points for every dollar of purchases. The points may be redeemable for gift cards, electronics, travel, cash and more.
• Cash-back cards allow consumers to earn cash rewards for making purchases. The cash reward, typically a percentage of purchases, may be applied to a balance(if there is one)or to future purchases with select retailers. Alternatively, the cash reward may be sent to the cardholder in check form.
• Airline mile / frequent-flier cards allow consumers to earn frequency program points for dollars charged. Points can be redeemed for rewards such as airline tickets and airline upgrades, hotel rooms and car rentals.
• Hotel or travel cards allow consumers to earn points toward free nights and/or room upgrades at a particular hotel chain, and sometimes toward airline tickets and rental cars, too.
• Retail or category rewards cards earn points for products or services bought from a specific retailer, such as a department store, gas station, home improvement store or bookstore, or a category of retail spending such as gasoline or grocery. Some retail rewards cards also offer discounts and invitations to special events.
• Refer to your cardholder’s agreements for information on rewards programs for the credit cards you carry.

Business Cards
Similar benefits that consumers enjoy from credit and charge cards are available to companies, which can use cards for everyday business expenses including office supplies, services (temporary labor, consultants) and corporate travel. Besides being a convenient alternative to the invoice-and-paper-check payment method, business cards help with expense tracking, simplify bill payment and reduce reliance on petty cash.

These cards come in a number of permutations — credit or charge, rewards or not, basic or premium — but also may come with additional features tailored to business needs. Business card users can determine billing arrangements (individual or central billing, for example) and can set spending controls, which limit card use to designated types of merchants or types of charges (such as airfare only). 

In addition to the cards that large corporations have used for many years, there are also other cards with more targeted use, including purchasing cards, corporate meeting cards and cards for small businesses.

Many business cards also offer a variety of benefits, such as discounts on certain products and services, or with certain vendors; enhanced insurance, emergency travel and medical assistance lines and travel agent services.