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
Nick Hewer is to leave The Apprentice after 10 years

TV review Nick Hewer, the man whose eyebrows speak a thousand words, is set to leave The Apprentice

Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says

film George RR Martin owns a cinema in Santa Fe

Arts and Entertainment
Clued up: John Lynch and Gillian Anderson in ‘The Fall’

TV review

Arts and Entertainment
The Baker (James Corden) struggles with Lilla Crawford’s Little Red Riding Hood

film...all the better to bamboozle us
Arts and Entertainment
English: Romantic Landscape

art
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Arts and Entertainment
Mark, Katie and Sanjay in The Apprentice boardroom
TV
Arts and Entertainment

Film The critics but sneer but these unfashionable festive films are our favourites

Arts and Entertainment
Frances O'Connor and James Nesbitt in 'The Missing'

TV We're so close to knowing what happened to Oliver Hughes, but a last-minute bluff crushes expectations

Arts and Entertainment
Joey Essex will be hitting the slopes for series two of The Jump

TV

Who is taking the plunge?
Arts and Entertainment
Katy Perry as an Ancient Egyptian princess in her latest music video for 'Dark Horse'

music
Arts and Entertainment
Dame Judi Dench, as M in Skyfall

film
Arts and Entertainment
Morrissey, 1988

TV
Arts and Entertainment
William Pooley from Suffolk is flying out to Free Town, Sierra Leone, to continue working in health centres to fight Ebola after surviving the disease himself

music
Arts and Entertainment
The Newsroom creator Aaron Sorkin

TV
Arts and Entertainment
Matt Berry (centre), the star of Channel 4 sitcom 'Toast of London'

TVA disappointingly dull denouement
Arts and Entertainment
Tales from the cryptanalyst: Benedict Cumberbatch in 'The Imitation Game'

film
Arts and Entertainment
Pixie Lott has been voted off Strictly Come Dancing 2014

Strictly
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.

    Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Could cannabis oil reverse the effects of cancer?

    Could cannabis oil reverse effects of cancer?

    As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
    The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

    The Interview movie review

    You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
    Serial mania has propelled podcasts into the cultural mainstream

    How podcasts became mainstream

    People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
    Jesus Christ has become an unlikely pin-up for hipster marketing companies

    Jesus Christ has become an unlikely pin-up

    Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
    Rosetta space mission voted most important scientific breakthrough of 2014

    A memorable year for science – if not for mice

    The most important scientific breakthroughs of 2014
    Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

    Christmas cocktails to make you merry

    Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
    5 best activity trackers

    Fitness technology: 5 best activity trackers

    Up the ante in your regimen and change the habits of a lifetime with this wearable tech
    Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

    Paul Scholes column

    It's a little-known fact, but I have played one of the seven dwarves
    Fifa's travelling circus once again steals limelight from real stars

    Fifa's travelling circus once again steals limelight from real stars

    Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
    Frank Warren column: 2014 – boxing is back and winning new fans

    Frank Warren: Boxing is back and winning new fans

    2014 proves it's now one of sport's biggest hitters again
    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
    Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

    The Boy in the Dress: On set with the stars

    Walliams' story about a boy who goes to school in a dress will be shown this Christmas