Binding is typically the easiest and least expensive method of finishing a carpet edge. Binding the edge of a carpet involves wrapping a strip of fabric (which is generally made from either polyester or cotton) around the edge of the carpet and stitching it in place.

Among the benefits of binding a carpet edge in this way are relatively low cost and the vast selection of binding materials available. There is a seemingly limitless color selection in binding, meaning that virtually any color of carpet can be matched. By matching the binding to the color of the carpet, the edge of the carpet will blend in without standing out.

Binding is typically used on carpet base.

Serging the edge of the carpet pieces produces a look that seems hand-sewn, although it is most often done by machine. Serging is also called overlock stitching, and it is done with a special machine designed for the purpose.

When finished, a serged edge looks as though a thick fiber has been wrapped around the edge of the carpet continuously. It is often considered to provide a higher-end look than simple binding, and it is commonly seen on manufactured area rugs. Serging is also available in a wide array of colors, although many places may have fewer choices in serging colors than in binding colors. 

Fringing is a common and somewhat iconic finishing treatment for area rugs. This is a look that is often seen: long fringed tassels, usually a white or off-white color.

In hand-knotted rugs, the fringe is necessary, as it is the edge of the “backbone” fibers of the area rug. On machine-made rugs, however, fringe is only for appearance and serves no practical purpose.