How Do Credit Cards Work? Are They Worth It?

Credit cards are one of the most popular forms of payment for goods and services.

How does this convenient way of spending work, though? Keep reading to learn more about how credit cards work to make the best financial decisions for you.

Credit cards are processed over the internet using payment processing companies, which charge sellers a fee for processing transactions.

How Do Credit Card Companies Make Money?

The credit card issuer makes money by charging you interest for loaning you money. There is a 21-day grace period where no interest is charged.

- Help you build credit. - Convenience and Flexibility - Buy now. Pay later. - Rewards.

Credit Card Pros

Credit Card Cons

- Overspending and debt. - High-interest rates. - Caps on rewards. - Harmful when not used responsibly.

New users are often drawn to credit cards due to their enticing rewards or widespread popularity. However, credit cards can make or break your financial future.