In order to use these cards wisely, you should know what each one is and how it differs from the others. Here's a primer. Credit Cards Credit cards can amount to nothing other than very expensive loans made by banks, gasoline companies and department stores. The credit card issuer gives you a card. The store merchant or service provider collects what you owe from the card issuer, whom you repay.
Credit cards yield high profits to their issuers for several reasons.
Finally, the companies profit by charging merchants and service providers a fee each time a customer uses the company's credit card in the merchant's establishment. Charge Cards Charge cards, also called travel and entertainment cards, are a little different from credit cards. Charge cards, such as American Express and Diners Club, have no credit limit. You can usually charge as much as you want, but you are required to pay off your entire balance when your bill arrives, with one exception. If you charge air fare, cruise fees or hotel fees for a hotel room booked through a travel agent on an American Express card, you can pay off your balance over 36 months.