A credit card transaction occurs when a customer uses their credit card to purchase goods or services. The process involves the cardholder presenting their card to the merchant, who then swipes or inserts it into a payment terminal. This action sends the card information to the bank or credit card issuer for approval. Once the transaction is processed, the bank verifies the cardholder's account and available credit. If approved, the amount is deducted from the cardholder's credit limit, and the merchant receives payment. The transaction is recorded, and the cardholder will later pay the bank for the amount spent, often with interest if not paid in full.