Credit cards are financial tools that allow individuals to make purchases on credit, borrowing money from a bank or financial institution. They provide a convenient and widely accepted method of payment, both online and in physical stores. Credit cards come with a predetermined credit limit, which represents the maximum amount that can be borrowed. Users are required to make regular payments towards their outstanding balance, either in full or in part, within a specified grace period to avoid interest charges.

Credit cards offer various benefits to cardholders, including the ability to build a credit history, earn rewards such as cashback or travel points, and enjoy additional perks like travel insurance or extended warranties on purchases. They also provide a layer of security, as cardholders are not held liable for fraudulent transactions if promptly reported.

However, it is important to use credit cards responsibly to avoid falling into debt. Failure to make timely payments can result in high-interest rates and late fees. It is recommended to carefully review terms and conditions, monitor spending habits, and create a budget to ensure that credit cards are used as a financial tool rather than a source of excessive debt.