If you own a credit card, you are authorized to charge purchases against a pre-approved line of credit.  Credit cards may be issued by banks, retailers, and other credit grantors.  Some card issuers charge an annual fee to cover account-servicing costs, others do not.

After making purchases with a credit card, they become payable after a Grace Period during which no finance charge is imposed.  Afterward, the balance due may be paid in full or paid down in monthly installments with interest.  This is commonly known as revolving credit.

Some card issuers charge credit card interest from the purchase date whether the cardholder's account has an outstanding balance or not.  Credit card interest rates, interest calculations, annual fees and repayment terms may vary considerably among cards.

Credit Cards: Pros and Cons
Credit has both advantages and disadvantages.
By understanding your responsibilities and using it wisely, you can capitalize on the advantages and reduce the disadvantages.

Advantages

•  Ability to buy needed items now
•  Don't have to carry cash
•  More convenient and widely accepted than
   checks
•  Creates a record of purchases
•  Receive loyalty points and other rebates

Disadvantages

•  The cost of the item may be higher if you
   incur interest
•  Using a card may incur fees
•  Financial difficulties may arise if you lose track
   of how much you spend each month
•  Provide an avenue for increase impulse
   buying