How

HOW DOES A CREDIT CARD WORK

HOW DOES A CREDIT CARD WORK

You can think of a credit card as a short-term loan from a credit card issuer.

Unlike a debit card, which takes money from your checking account, a credit card uses the issuer’s money and then bills you later. (This also makes them a stronger ally in cases of fraud.)

Because your card activity is reported to the credit bureaus (which doesn’t happen with debit cards), using credit cards responsibly can help you build good credit. This credit history will help you when it comes time to apply for bigger loans like a mortgage, or when you’re applying for a job or apartment.

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