A credit card is a revolving credit instrument that lets you borrow money from the issuing bank to make purchases. You get a credit limit, spend up to that limit, and receive a monthly bill. Pay in full by the due date — no interest. Pay less, and interest kicks in.
Credit card interest rates are among the highest in consumer finance — typically 24-42% APR in India and 18-29% in the US. If you carry a $5,000 balance at 24% and make only minimum payments, it takes over 20 years and costs $8,000+ in interest to pay off.
Despite the risks, credit cards offer powerful benefits: rewards (1-5% cashback), travel perks, purchase protection, fraud liability protection, and credit score building. The global credit card market processes over $35 trillion annually. Visa and Mastercard together control over 80% of the market outside China (where UnionPay dominates).