Credit Card works by allowing you to borrow money from the card issuer (bank) to meet your financial needs. It comes pre-loaded with an approved credit limit by the bank for making purchases (POS, ATM withdrawal, ecommerce etc). The spend from your credit card is required to be paid back later at the frequency agreed with the card issuer at the point of issuance. Most credit card usage earn you reward points and helps in building your credit profile.