Are you someone who typically uses credit cards to finance purchases over time, but you would like to become a “pay it off in full every month” kind of cardholder instead? Paying off your credit card balance in full each month has benefits like not allowing you to go into debt and letting you enjoy interest free days on new purchases until your next payment due date. Plus you still get to earn rewards and get the other perks your credit cards offer.

Sometimes consumers have a hard time making that transition. One way you can try to do that is to start thinking of your credit cards as charge cards instead.

The Difference Between Credit Cards and Charge Cards

Sometimes the terms “credit card” and “charge card” are used interchangeably. But they’re actually two very different things. Credit cards extend you an ongoing line of credit. You can use them to finance purchases over the course of weeks or months. You just have to meet at least the minimum payment due. Charge cards on the other hand are merely tools of convenience. They are not longstanding lines of credit. You are not allowed to pay off the balance over an extended period; you pay off the balance in full every month.

An example of a charge card would be the American Express Platinum card where you have no preset spending limit (like the credit limit of a traditional credit card). Charges are approved on a case-by-case basis depending on how much the company determines you can afford to repay each month. You’re responsible for the full balance every month when your bill comes — no stretching out the payments.

How to Treat Your Credit Card Like a Charge Card

Some credit card users already treat their credit cards like charge cards. They pay off the bill in full every month simply to stay out of debt and get the benefits the card offers. But other consumers struggle with that transition. If you’re in that latter group and you’re concerned about credit card debt, challenge yourself to make a change.

Set up your own kinds of penalties if you don’t pay off your bill in full one month. For example, don’t let yourself use the card again until you bring the balance back down to $0. Or have a self-imposed “late fee” — if you don’t pay off the bill in full that fee goes toward something or someone else. That could be anything from a savings account you can’t touch for a certain period of time to giving the money to someone in need. When you have to part with immediate cash you might find it easier to change your habits. Just remember that the fee is in addition to paying off the balance.

A punishment approach won’t work for everyone. You could also come up with rewards for months when you pay your balance off in full. Maybe you’ll go out to see a movie or have dinner at your favourite restaurant. It doesn’t need to be anything too expensive — just something that will motivate you to make a change in your spending behaviour. No matter what your reasons are for wanting to treat your credit card more like a charge card, you have it in you to make it happen.