Unsecured Charge Card

A credit line with no collateral, repaid in full each billing cycle. Underwriting decides who gets one and how much they get.

An unsecured charge card extends credit against nothing but the cardholder’s creditworthiness. There is no deposit backing it and no collateral to fall back on, so the product turns on underwriting: someone has to decide whether to lend and how much.

Because the balance is repaid in full each cycle and never carries, no interest accrues. Revenue comes from interchange and fees rather than finance charges.

Overview

Key Concepts

Unsecured credit and the credit limit

Nothing secures the line, so the credit limit is the output of a credit decision rather than of what the customer holds. It is set on the account as credit_limit, in cents.

Available credit is the limit minus the current balance: it falls as the cardholder spends and recovers when they repay.

This is the main difference from the Secured Smart Card, where spending power comes from the customer’s own deposits and no credit decision is made.

Charge, not revolving

The full balance is due each cycle. In the API this is not a policy you enforce yourself — it is the account’s minimum_payment scheme, and for a charge account the only supported value is FULL.

A revolving account supports RATE_OR_AMOUNT as well, which is what allows a balance to be carried and interest to accrue. Choosing the account type chooses the repayment behaviour. See Revolving Credit Card.

Billing cycle and grace period

billing_period sets the frequency and the day each cycle anchors to. Monthly is the common choice, and a monthly cycle must start between the 1st and the 28th so that every month contains the start day.

grace_period is how many days past the end of the cycle the customer has before payment is considered overdue, and it determines the due date. It is required on the account template.

How It Differs from Other Cards

	Unsecured Charge	Secured Smart Card	Revolving Credit	Debit
Backed by	Nothing — the credit line is unsecured	The customer’s own deposits	A credit line	The deposit account itself
Underwriting	Required	None	Depends on bank agreement	None
Application	Required	Optional	Required	None
Carrying a balance	Not allowed	Not allowed	Allowed	Not applicable
Minimum payment scheme	FULL only	FULL only	FULL or RATE_OR_AMOUNT	Not applicable
Interest	None	None	On carried balances	None
Account type	CHARGE_UNSECURED	CHARGE_SECURED	CREDIT_CARD	CHECKING

Charge cards can be issued to consumers or businesses.

Who Decides What

Responsibility	Who
Credit decision and limit	Underwriting — depends on program structure agreed between you and your sponsor bank.
Capital	Whoever funds the receivable: you, a debt provider, or your sponsor bank.
Authorization	Synctera, against available credit, account standing, spend controls, and fraud rules.
Repayment	The customer, in full each cycle.
Adverse action notices	You, within the regulatory deadline, using the records Synctera holds.
Collections	Typically you, or a servicer you appoint.

API Flow

An unsecured charge account cannot exist without an approved application, so the application is the spine of this flow rather than an optional step.

The curl examples assume you have set up baseurl and apikey environment variables. See Base URL and Authentication.

Step 1 — Create and Verify the Customer

Create the person or business and complete KYC or KYB. See Create a Personal Customer, Create a Business, and KYC/KYB Verification.

Step 2 — Record Disclosures

Record the customer’s acknowledgement of each required disclosure. See Record Disclosure Acceptance.

Step 3 — Create the Application

The customer applies through the Application API. This is required — without an approved application there is no application_id, and without that the account cannot be created.

See Credit Applications.

Step 4 — Record the Credit Decision

Underwriting depends on program structure agreed between you and your sponsor bank.

The application must be approved and accepted by the applicant before the account can be created.

Step 5 — Handle a Declined Application

A declined applicant must receive an adverse action notice. Under Regulation B and the FCRA it has to reach them within 30 days of the decision and state the specific reasons for denial, along with the required ECOA and enforcement agency language.

Create the record with Create Adverse Action, then mark the application CREDIT_DENIED with the adverse action ID attached. Required for personal customers, optional for business customers.

See Adverse Actions.

Step 6 — Create the Account

Create the CHARGE_UNSECURED account, passing the approved application and the credit limit.

Shell

curl -X POST "$baseurl/v2/accounts" \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  --data-binary '{
    "account_template_id": "{ACCOUNT_TEMPLATE_ID}",
    "account_purpose": "Charge Card Account",
    "application_id": "{APPLICATION_ID}",
    "credit_limit": 100000,
    "relationships": [
      {
        "relationship_type": "PRIMARY_ACCOUNT_HOLDER",
        "customer_id": "{CUSTOMER_ID}"
      }
    ]
  }'

credit_limit is in cents, so the value above is a $1,000 limit. The template supplies the billing period, grace period, and minimum payment scheme.

See Unsecured Charge Accounts.

We refer to the resulting account’s UUID as {ACCOUNT_ID}.

Step 7 — Issue the Card

Issue against the charge account with "type": "CREDIT", using a card product on a BIN that supports credit. Physical and virtual cards are both supported.

Shell

curl -X POST "$baseurl/v2/cards" \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  --data-binary '{
    "type": "CREDIT",
    "card_details": {
      "form": "VIRTUAL",
      "account_id": "{ACCOUNT_ID}",
      "customer_id": "{CUSTOMER_ID}",
      "card_product_id": "{CARD_PRODUCT_ID}"
    }
  }'

See Issue a Card.

Running the Program

Repayment

The full balance is due by the date the grace period sets. Because nothing carries, a missed payment is a delinquency rather than a rolled balance — there is no interest mechanism to absorb it.

Statements

Synctera closes each billing cycle and generates a statement showing the transactions, the balance, and the due date. See Statements.

Spend Controls

Spend controls limit spend by amount, window, payment type, and merchant category, and attach to the account. See Spend Controls.

Fees and Rewards

With no interest to earn, fees and interchange carry the economics. Configure fees and any rewards as rules bundled into products linked to the account template. See Fees and Rewards.

Disputes

Cardholders can dispute any card transaction. See Card Transaction Disputes.

Delinquency and Collections

Your program configuration sets how long past the due date a card is suspended, when the customer is reported delinquent, and when the balance is charged off. Collections are typically your responsibility or a servicer’s.

Credit Bureau Reporting

Payment history on the account can be furnished to the credit bureaus. Furnishing requires bureau credentialing for your program, arranged with your Synctera representative.