A credit card is a revolving line of credit. Every purchase becomes short-term debt at the card's APR. Pay the statement in full by the due date and there's usually a grace period — no interest.
Used responsibly, credit cards offer purchase protection, rewards, and are the fastest way to build a credit history. Used casually, they become one of the most expensive forms of debt on the market.
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Talk to Auri →Frequently asked questions
Does using a credit card hurt my credit?
The opposite — regular use with on-time payoff builds credit. Carrying a high balance relative to your limit (utilization) is what hurts scores.
Should I close old credit cards?
Usually no — length of credit history helps your score. Keep older no-fee cards open and use them for a small recurring charge.
Related terms
Credit score
A three-digit number that estimates how reliably you repay borrowed money.
Credit utilization
The percentage of your available credit that you're currently using.
APR (annual percentage rate)
The yearly cost of borrowing, including interest and most fees, expressed as a percentage.
Minimum payment
The smallest amount you can pay on a credit card or loan without triggering a late fee.