Money: The card that's fit for a king

Sudden craving for two dozen hamburgers? A new Cadillac? A charge - not credit - card is for you.

FANCY A lot of spending money, possibly with no pre-set spending limit - plus a range of other benefits, including free insurance and even Air Miles? If so, charge cards could be the answer. Unlike a traditional credit card, where you borrow money and pay it back gradually, a charge card bill must be paid off right away.

All charge cards require your account to be cleared in full within a set period, usually one month. If you fail to pay off the balance, expect your card to be cancelled, an adverse reference to go on your credit history, and for the card provider to pass your debt to a local credit-collection agency.

What they offer in return for such draconian repayment requirements is convenience and immediate spending power. Some cards have no pre-set spending limit, others go up to pounds 15,000. They are widely accepted: during the siege of Sarajevo, for example, American Express charge cards were used by journalists in the city's hotels.

Other charge cards are mostly part of the Visa or MasterCard payment systems. You can use them very widely throughout the world.

Expect to pay an annual fee for a charge card, ranging from pounds 37.50 for American Express's standard green card up to pounds 150 for NatWest Bank's Premier MasterCard.

Some providers only issue cards to those meeting minimum income requirements, typically of between pounds 25,000 and pounds 40,000 a year. Others, notably American Express, take a discretionary approach, based on looking at applicants' wider circumstances, including home ownership.

Some banks issuing cards offer an overdraft facility linked to spending on the card. These are discretionary, and most charge 2.5 per cent above the bank's own base lending rate.

You can use charge cards at most UK outlets and there is no transaction charge on the user. Card providers charge retailers fees on a percentage basis. You can also use the cards for UK cash withdrawals. Most will charge you 1.5 per cent of the amount, but British Airways Diners Club push this up to a hefty 4 per cent with a cash minimum of pounds 4.

Amounts you spend abroad are translated into your home currency at the going rate of exchange, and an administration charge, also known as a foreign usage loading, is added, which ranges from 2 to 2.75 per cent according to which card you are using.

Because of their flexibility, however, charge cards are popular with business travellers. They are an easy way to book airline tickets, hire cars or pay for hotel bills. Perhaps this is why some cards offer free Air Miles as a reward for spending. American Express has a more complex reward point system. Spend pounds 5,000 annually on either its Green or Gold cards, and you qualify for a weekend at any IBIS hotel in Spain.

Charge cards also offer a range of other insurance benefits of use to travellers. All give free travel and accident insurance. Midland Bank's gold card offers a miserly pounds 25,000 maximum cover, but others offer cover worth up to pounds 500,000.

This cover only pays out if you suffer accident or death resulting from the purchase of a ticket through the relevant card. If you are on a scheduled flight which crashes then all cards will pay out to your next of kin.

Other benefits include free lost or delayed luggage insurance, and cover the cost of extra tickets bought because of flight delays and cancellations. Many also offer personal liability insurance: spill an in-flight coffee pot over your neighbour and you are covered for any injury or loss of earnings claim they might make against you.

Some cards also offer a free extended warranty on items purchased with it. Also look out for free card protection; if your card is stolen and used, you will not have to pay off the amount the thief has spent on it.

Finally, most cards offer free "purchase protection" covering the value of items bought with the card against theft or damage, some for up to 100 days after the date of purchase.

Arts and Entertainment
Kathy (Sally Lindsay) in Ordinary Lies
tvReview: The seemingly dull Kathy proves her life is anything but a snoozefest
Arts and Entertainment

Listen to his collaboration with Naughty Boy

music
Arts and Entertainment
Daniel Craig in a scene from ‘Spectre’, released in the UK on 23 October

film
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap

film
Arts and Entertainment

Poldark review
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Arts and Entertainment
TV
Arts and Entertainment
Katie Brayben is nominated for Best Actress in a Musical for her role as Carole King in Beautiful

film
Arts and Entertainment
Israeli-born actress Gal Gadot has been cast to play Wonder Woman
film
News
Top Gear presenter James May appears to be struggling with his new-found free time
people
Arts and Entertainment
Kendrick Lamar at the Made in America Festival in Los Angeles last summer
music
Arts and Entertainment
'Marley & Me' with Jennifer Aniston and Owen Wilson
film
Arts and Entertainment
Jon Hamm (right) and John Slattery in the final series of Mad Men
tv
Arts and Entertainment
theatre
Arts and Entertainment
Place Blanche, Paris, 1961, shot by Christer Strömholm
photographyHow the famous camera transformed photography for ever
Arts and Entertainment
The ‘Westmacott Athlete’
art
Arts and Entertainment
‘The Royals’ – a ‘twisted, soapy take on England’s first family’
tv Some of the characters appear to have clear real-life counterparts
News
Brooks is among a dozen show-business professionals ever to have achieved Egot status
people
Arts and Entertainment
A cut above: Sean Penn is outclassed by Mark Rylance in The Gunman
film review
Arts and Entertainment
arts + ents
Arts and Entertainment
James Franco and Zachary Quinto in I Am Michael

Film review Michael Glatze biopic isn't about a self-hating gay man gone straight

Arts and Entertainment
A scene from the movie 'Get Hard'
tvWill Ferrell’s new film Get Hard receives its first reviews
Arts and Entertainment
Left to right: David Cameron (Mark Dexter), Nick Clegg (Bertie Carvel) and Gordon Brown (Ian Grieve)
tvReview: Ian Grieve gets another chance to play Gordon Brown... this is the kinder version
Arts and Entertainment
Benedict Cumberbatch and Martin Freeman in the first look picture from next year's Sherlock special

TV
Arts and Entertainment
Because it wouldn’t be Glastonbury without people kicking off about the headline acts, a petition has already been launched to stop Kanye West performing on the Saturday night

music
Arts and Entertainment
Molly Risker, Helen Monks, Caden-Ellis Wall, Rebekah Staton, Erin Freeman, Philip Jackson and Alexa Davies in ‘Raised by Wolves’

TV review
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    General Election 2015: The masterminds behind the scenes

    The masterminds behind the election

    How do you get your party leader to embrace a message and then stick to it? By employing these people
    Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

    Machine Gun America

    The amusement park where teenagers go to shoot a huge range of automatic weapons
    The ethics of pet food: Why are we are so selective in how we show animals our love?

    The ethics of pet food

    Why are we are so selective in how we show animals our love?
    How Tansy Davies turned 9/11 into her opera 'Between Worlds'

    How a composer turned 9/11 into her opera 'Between Worlds'

    Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
    11 best bedside tables

    11 best bedside tables

    It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
    Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

    Italy vs England player ratings

    Did Townsend's goal see him beat Kane and Rooney to top marks?
    Danny Higginbotham: An underdog's tale of making the most of it

    An underdog's tale of making the most of it

    Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
    Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

    Steve Bunce: Inside Boxing

    Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
    No postcode? No vote

    Floating voters

    How living on a houseboat meant I didn't officially 'exist'
    Louis Theroux's affable Englishman routine begins to wear thin

    By Reason of Insanity

    Louis Theroux's affable Englishman routine begins to wear thin
    Power dressing is back – but no shoulderpads!

    Power dressing is back

    But banish all thoughts of Eighties shoulderpads
    Spanish stone-age cave paintings 'under threat' after being re-opened to the public

    Spanish stone-age cave paintings in Altamira 'under threat'

    Caves were re-opened to the public
    'I was the bookies’ favourite to be first to leave the Cabinet'

    Vince Cable interview

    'I was the bookies’ favourite to be first to leave the Cabinet'
    Election 2015: How many of the Government's coalition agreement promises have been kept?

    Promises, promises

    But how many coalition agreement pledges have been kept?
    The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

    The death of a Gaza fisherman

    He built his own reef, and was fatally shot there by an Israeli gunboat