Credit card payments allow consumers to purchase goods and services using borrowed money from a financial institution. When a cardholder makes a purchase, the credit card company pays the merchant on behalf of the consumer, who then repays the company later, usually within a billing cycle. This system enables immediate access to funds without needing cash on hand. To use a credit card, individuals must apply for one through a bank or financial institution. Each card has a credit limit, which is the maximum amount that can be borrowed. Timely payments help maintain a good credit score, while late payments can lead to fees and increased interest rates.