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What’s a Credit Card?

Got a credit card? Two, or three? Do you really know how they work?

Credit cards let you borrow money from a bank, credit union, merchant, or other financial institutions to make purchases. They offer unsecured personal loans at points of sale in lieu of payment by cash or check.

Now their popularity has grown exponentially since Bank of America first introduced a general-purpose credit card in 1966 – although credit had been used by merchants long before that.  

Credit card companies support their existence with annual fees, cash advance fees, or late payment fees. They charge interest on unpaid debt and charge transaction fees to merchants.

Some cards offer rewards and most have an upper limit determined by credit scores. 

The best way to use credit cards is to pay them in full each month. If you don’t, it costs you, and the interest they’re charging you is applied daily. This causes your outstanding balance to increase with each passing day.


Balance transfer cards allow you to move existing debt to a new credit card – usually with lower interest. Some offer transfers with no interest for several months. Now, this CAN be helpful in certain situations. However, it’s crucial that the balance is paid in full during the grace period because the interest after that can be very high.

So, if using a credit card, pay off your balances each month to avoid becoming “a slave of the lender”! 

And if credit card debt is a cause of anxiety in your life, I recommend Christian Credit Counselors. They can create a debt management plan just for you. For more information call the Crown Helpline – 800-722-1976 or visit online at