Credit Cards

money · shopping · borrowing

What it does. A credit card is a special payment card issued by a bank that lets you purchase things without having cash in your pocket right now. You get a bill later and have to pay back what you spent.

Banks are behind it. A bank gives you the credit card and keeps track of how much you've spent. The bank is actually lending you money when you use the card, which is why you owe them later.

You must repay it. Every month or billing period, you get a statement showing everything you bought with the card. You then have to pay back the money you borrowed, or at least a minimum amount.

Used everywhere. Credit cards are one of the most popular ways people pay for things around the world. Millions of people use them every single day instead of carrying cash or checks.

Watch out for debt. If you don't pay back your credit card debt, it grows larger because the bank charges interest (extra money). This can make it really hard to pay off later.