Credit card
A card that lets you borrow money to pay for things. If you don't pay the full bill each month, you're charged interest on what's left.
In the news
How “credit card” came up in recent issues.
- Oct 21Netflix earned more than expected, but its stock still fell
“The lesson works for any loan, from a car to a credit card: small rate differences add up when you borrow a lot or borrow for a long time.”
Learn the bigger idea
Related words
- Credit score
- A number, usually from 300 to 850, that tells lenders how likely you are to pay back what you borrow. Paying bills on time is the biggest factor.
- Credit report
- A record of how you've borrowed and paid back money. You can check yours for free at AnnualCreditReport.com.
- Credit utilization
- How much of your available credit you're using. Using a small share of your credit limit is better for your score.
- APR
- Annual percentage rate: the yearly cost of borrowing money, shown as a percent. It includes interest and some fees. Many credit cards charge more than 20%.
- Minimum payment
- The smallest amount you can pay on a credit card bill without a late fee. Paying only the minimum can keep you in debt for years.
- Loan term
- How long you have to pay back a loan, like 60 months for a car loan.
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