What Exactly Is a Credit Card?

A credit card is more than just a piece of plastic—it’s a short-term loan from the bank that allows you to make purchases now and pay later. Used wisely, it can help you build credit, earn rewards, and even provide extra security on purchases.

Think of it like this:
Imagine a friend spots you $50 for lunch, and you promise to pay them back next week. That’s basically how a credit card works—except your ‘friend’ is a bank, and if you take too long to pay them back, they’ll charge you interest.

Key takeaway: Every time you swipe, tap, or insert your credit card, you’re borrowing money from the bank. Pay it back on time, and you’ll avoid interest. Let’s break it all down in this lesson!