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A credit card is a plastic card that allows the cardholder to borrow money from a financial institution, typically a bank, to make purchases or pay for services. Credit cards work on the principle of revolving credit, meaning the cardholder can carry a balance from one month to the next and only pay interest on the outstanding balance.
Credit cards typically come with a credit limit, which is the maximum amount the cardholder can borrow. The cardholder can make purchases up to this limit, and they will be required to make at least a minimum payment each month, which is a percentage of the outstanding balance.
Credit cards also often come with rewards programs that allow cardholders to earn points, cash back, or other incentives for using the card to make purchases. However, credit cards can also come with fees and high interest rates, and carrying a balance can lead to significant debt if not managed properly.