Understanding Credit Cards
Understanding Credit Cards: What They Are and How to Use Them Wisely In today’s world, credit cards are more than just a piece of plastic in your wallet—they're powerful financial tools that can offer convenience, security, and even rewards. But with great power comes great responsibility. Understanding how credit cards work, their benefits, and the risks involved can help you make smarter financial decisions. What Is a Credit Card? A credit card is a payment card issued by financial institutions that allows you to borrow funds to pay for goods and services. Unlike debit cards, which pull money directly from your bank account, credit cards let you borrow money up to a pre-approved limit. You’re expected to pay back the borrowed amount, either in full or over time with interest. How Do Credit Cards Work? When you use a credit card, the card issuer pays the merchant on your behalf. You then repay the card issuer, either by the due date (to avoid interest) or over time (with int...