Wednesday, July 09, 2008


Both charge cards and credit cards allow you to conduct cashless transactions, there are differences between these two types of payment cards. The main difference between charge cards and credit cards is on the required amount that is payable by the payment due date.

For conventional charge cards, you must settle the outstanding balance in full by the payment due date and there will be no interest charged. However, a late payment charge
will be imposed if you fail to do so. The late payment charge is usually between 3.0%
to 3.5% per month (or 36% to 42% per annum) of the outstanding balance.

For Islamic charge cards, a compensation fee will be imposed up to a certain maximum
amount allowed, normally RM70 per month and NO COMPOUND INTEREST. Issuers will usually cancel your charge card if you have defaulted on such repayments for a few months (period varies depending on the issuer’s internal policy).

As for credit cards, you may settle your outstanding balance in full by the due date, or
pay at least the minimum monthly repayment, which is usually 5% of the total outstanding
balance. While credit cards offer you a flexible way of paying your credit card debt, it can be

Credit card issuers usually impose a finance charge of about 18% per annum for the balances
that are unpaid and a late payment charge is imposed if you fail to pay at least the minimum
monthly repayment by the due date.

Conventional Charge Card : AMEX, Diner's Club.

Islamic Charge Card : HSBC Amanah,Alrajhi, Bank Islam Charge Card. (, and

check for my previous posts about tips and trick to use Credit card/charge card.

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