What is Credit?

When you buy something on credit, it means that someone loaned you the money for it – usually a store or a bank. Credit cards (Visa, MasterCard, whatever) are cards you use to buy stuff with, instead of using cash. Credit cards are totally convenient and they help out in a financial emergency, but they aren’t perfect. If you don’t pay off your whole credit card bill when it comes at the end of the month, you’ll be charged interest on the remaining balance, which means that that $50 sweater you put on your MasterCard could end up costing you a lot more than $50 in the long run. This can totally add up and you can wind up owing big money to the credit card companies if you’re not careful.

Source: http://www.kidzworld.com/article/3927-credit-cards

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