A credit card is issued by a bank or financial services company and allows you to borrow money to pay for goods and services at retailers that accept credit cards. Unlike debit cards, which withdraw funds directly from your account, credit cards allow you to borrow money from the bank under the condition that you repay it over time, along with interest and any additional fees specified when you sign up.

Your credit score reflects your financial reliability; the higher your score, the better the deals you can secure on financial products like loans or mortgages. A credit score improves when you stay within your credit limit and make at least the minimum payment on time (though paying the full amount is preferable) and decreases if you miss payments, pay late, or exceed your credit limit.

Annual Percentage Rate (APR):

APR represents the cost of borrowing on a credit card for a year. It includes the interest rate charged and any other fees, such as application fees. A higher APR means it is more expensive to borrow, while a lower APR indicates a cheaper cost of borrowing. APR provides an overall equivalent cost of a debt, allowing you to compare different credit and loan products.