Simply put, a credit card is a type of loan that allows you to buy products up to a certain limit and pay for them later, either all at once or in installments. You may make purchases in the same way that you would with a debit card, but there is one major distinction. Paying with a debit card uses funds from your current account, whereas paying with a credit card requires borrowing funds from the credit card company. When you use a credit card, the amount you spend is added to your account's balance. This is the entire amount you owe, plus any interest and fees. What you need to know Because using a credit card might be costly, you should aim to pay off your entire balance each month. If you don't, you'll be in trouble Unless you have a special introductory offer from your card provider, you will be charged interest on your balance.