EXPERT RESPONSE
A CHAR and a VARCHAR2 are stored identically. The difference between the two is that CHAR(n) will always be "n" bytes long and will blank pad to ensure this. Whereas a VARCHAR2(n) will only store the amount of bytes that is actually there. For instance, if you have CHAR(5) and VARCHAR2(5) and insert the word 'CAR' into that column, the CHAR column will contain 'CAR ' and the VARCHAR2 column will contain 'CAR'. Using CHAR on a field with varying length entries can be a real pain due to the search semantics. You'd always have to make sure and trim a CHAR field when doing comparisons. In our 'CAR' example, CHAR(5) <> VARCHAR2(5). In other words, 'CAR ' does not equal 'CAR'.
For a good example of how you can see the differences in performance see Tom Kytes's answer to a similar question.
This link will show you how PL/SQL deals with CHAR and VARCHAR2 differently.
In general, I only use CHAR if I'm doing a CHAR(1)....and not because of any real performance reason... I'm just lazy and typing CHAR(1) takes less typing than VARCHAR2(1)! Otherwise, there's not a real reason to use CHAR and more good reasons to use VARCHAR2. For More Information
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