credit card

A credit card is a tool that allows you to make purchases or withdraw cash up to a pre-approved limit without immediately paying cash. When you use the card, the bank or credit issuer pays the merchant on your behalf. You then owe that amount to the issuer, which you can pay back directly or over time, often with interest. Using a credit card responsibly can help build your credit score, but carrying high balances or missing payments can lead to financial charges and impact your credit.