Credit Card Basics

Credit cards differ from debit cards in that each time a credit card is used for a transaction, the card issuer lends the card user the amount of money required to cover each charge to be repaid at a later date with a specified interest rate. Credit cards also differ from charge cards, where charge cards are repaid at the end of each month in full as opposed to in installments, or periodic payments, that can be made when a credit card is used.

To obtain a credit card, one must first be approved by the card issuer and be ...