A person used a credit card to build credit and was approved

What is a Credit Card?

Milad Hassibi November 27, 2018

A credit card is defined as a card issued by a bank or financial institution that provides you with a line of credit to make certain purchases before actually paying for them. Credit cards can be used to pay for a round trip flight or even for just a cheeseburger.

With a credit card, you are required to pay back the funds that you borrowed by a certain date, usually 25-30 days after your purchase. If the amount is not paid back in that time period, you will be subject to paying interest – a specific percentage of the borrowed funds that you must pay back on top of the amount you borrowed/used on the credit card initially

Pros and cons of credit cards

Credit cards offer many benefits, but as always, there are some downfallsA woman stands in front of a credit card she was approved for


  • Safer than carrying around large amounts of cash
  • You can pay off larger purchases over time
  • You can build and establish a healthy credit history
  • You can collect rewards such as points to redeem


  • Credit cards can make it easy for some consumers to fall into the never-ending cycle of debt
  • Missing a credit card payment can add interest and additional late fees
  • Interest accumulates over time, increasing the amount you must repay

Credit Card Interest and Fees

Credit cards are not free and charge different fees and rates to consumers. There are three ways most credit card companies make money:

  • Interest Payments – Added to your debts when the debt is not repaid in full
  • Fees – These usually come in the form of late fees, penalties, and annual fees
  • Transaction Fees- These fees are usually charged to the merchants, but recently many merchants have passed this fee onto the consumer

Where to Get a Credit Card?

Credit cards are much easier to find than you may think. Your credit card should be able to match your lifestyle while adding convenience and rewards for loyalty. A credit card is issued by a bank, like Chase or Wells Fargo.

Companies like Mastercard and American Express are simply just credit networks. The networks will determine where a certain card is to be accepted.

Final Note

If you are looking for a credit card to start your credit-related journey, be sure to take the time to conduct thorough research on the pros and cons of each credit card. If you have less than perfect credit and don’t know where to go, CrediReady can help.

Our trusted network of credit repair experts can boost your score and help you qualify for the credit you need. Take a moment to fill out our free no-obligation credit repair inquiry form and start fixing your credit today!

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