Credit cards are one of the most popular forms of payment for goods and services. The thin rectangular piece of plastic or metal serves as a payment option for buyers to borrow funds for purchases today and pay them back later.
Credit cards allow users to make purchases and pay bills. First, a buyer gives the credit card to a merchant, who electronically contacts your credit card issuer to authorize the transaction based upon the credit card terms. Then the bank (credit card issuer in most cases) applies the transaction to your credit card balance.
The credit card issuer makes money by charging you interest for loaning you money. There is a 21-day grace period where no interest is charged. If you don't pay the debt back by then, you will incur interest fees.
Nobody “needs” a credit card. It should only be used by those that have the means to pay the bill on time. If you try using credit cards without a solid financial plan and payment history, you could waste tens of thousands of dollars over a lifetime.