How does a credit card work

Thinking of getting a credit card? If you know how to use it correctly and manage your expenses, it can become a tool that offers great benefits. Therefore, it is essential that you know exactly how a credit card works from the beginning.

What is the Credit Card?

A credit card is a payment tool mainly offered by banking institutions that you can use to pay for your purchases in most establishments around the world, and all those that have a terminal to process card payments.

Getting a Credit Card

Whether a bank has offered you a pre-approved card or you are thinking of applying for one, the institution with which you get your credit card can evaluate factors such as your credit history, income and ability to pay for the approval and assignment of one. When you get a credit card, you also receive it with a certain credit limit. This establishes the maximum amount of money that you can access, either to make the payment of your purchases using plastic or to have cash.

The Approved Credit Card

Once your credit card has been approved by the institution and you have accepted it, they will give you a personalized plastic with a unique identification number, an expiration date and a security code, which are the essential data you would use to process your purchases and payments. To make purchases with your credit card in physical establishments it is essential to present your card, which must be read by the establishment’s terminal in order to process the payment.


It is recommended that you always carry an official ID with you because some businesses will want to make sure that you are the owner of the card. Once the purchase is processed, you must sign a receipt to confirm the purchase and you will receive a copy as proof. Ideally you should keep it at least until you receive your account statement, in case you need to make clarifications.