A credit card is a payment card enables you to borrow money from a bank or credit card issuer to make purchases. When you use a credit card to buy something, you're essentially taking out a short-term loan from the credit card company. You must pay back the borrowed amount and any interest charged by the company within a specified period.
Credit cards come with various benefits including rewards points, additional perks like travel insurance and cashback offers. However, credit cards may also have fees and interest charges. These all add up if you don't pay your balance in full each month.
An individual or business typically needs to have a good credit score and steady income to apply for a credit card. If you're approved for a credit card, you'll receive a credit limit. A credit limit is the maximum amount you're allowed to borrow on the card. Generally you'd receive a monthly statement outlining your credit card balance and any payments due.