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 processes the payment through a payment processor. This allows the merchant to receive funds from the cardholder's bank, while the cardholder borrows money from their credit limit to complete the purchase. Once the transaction is approved, the amount is deducted from the cardholder's available credit. The cardholder will later receive a credit card statement detailing their purchases, and they are required to pay back the borrowed amount, often with interest if not paid in full by the due date.