08: How Does a Credit Card Work?

Finance With Kids

Credit cards are a type of payment method that allow you to purchase goods and services without having to pay for them upfront. When you use a credit card, the merchant will charge your account (this is called making a purchase). You then have a certain amount of time to pay off the balance, usually around 30 days. If you don't manage to pay off the full amount in time, you will be charged interest on what you owe. This is why it is important to only make purchases on your credit card that you can afford to pay back when the bill arrives.
Kids, if you want to be on the show, ask your adult to help you record your name, where you live, and question on a voice recording app, and then email it to [e-mail]. For example "Hi, my name is Leah, I'm 6 years old, I live in San Diego, California, and my question is--what is an asset?"
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