Credit cards are a great tool to help you make the most of your finances. But if you think of them as magical pieces of plastic that let you buy whatever you want, you could be in for a rude awakening down the line. Understanding the basics of credit cards will allow you to take advantage of the numerous benefits they provide while avoiding the pitfalls.
A credit card is tied to a credit account, which is just a loan account. Unlike a car loan or a mortgage, however, credit accounts offer a revolving line of credit. Users can take money out (by purchasing goods and services or taking out a cash advance) and pay it back at their convenience.
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Source: Fool.com