A credit card transaction occurs when a customer uses their credit card to purchase goods or services. The card is swiped or entered online, and the transaction details are sent to the merchant's bank for approval. This process typically takes just a few seconds. Once approved, the merchant receives payment, and the amount is charged to the customer's credit card account. The customer will then pay back the credit card issuer later, often with interest if the balance is not paid in full by the due date.