Which best describes how a credit card works? a. The credit card company extendsyou a line of credit. You then pay a small percentage of the cost of those purchases in one annual payment. b. The credit card company extends you a line of credit. You purchase "stuff" and the purchase gets directly paid with funds in your checking account. c. The credit card company extends you a line of credit. This is free money that you car use to purchase the "stuff" that you need. d. The credit card company extends you a line of credit. You purchase "stuff" and then have the choice to pay the balance in full or a minimum payment each month.

When you use a credit card, you're essentially borrowing money from the credit card company up to a set limit. This allows you to make purchases without dipping into your current cash flow. At the end of the billing cycle, you’ll receive a statement detailing your charges, and you get to decide how much of the balance to pay off. Paying in full avoids interest charges, while only making the minimum payment often results in extra costs over time due to interest rates. Credit cards can also offer various perks which can significantly enhance your shopping experience! Many cards provide rewards points, cashback on purchases, or travel benefits, making it a fun game to earn those rewards. Just remember to pay on time and keep your balance in check to maximize these benefits without falling into debt!