Financial Terms Explained: Credit Cards

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Oct 21, 2025

A credit card is a popular financial instrument that lets you make purchases on credit—whether for shopping, dining, or other services—at physical or online merchants that accept credit card payments.

How it works

In essence, a credit card functions as a revolving loan facility. The issuing bank gives you a set credit limit, which is the maximum amount you can borrow. Unlike a typical loan, you can borrow and repay from this limit repeatedly as long as you stay within it.

To make sure you are working within your limit, your bank sends you a monthly billing statement to help you review your recent credit card purchases and settle your outstanding balance. You may also view this on mobile devices. Paying your balance in full restores your credit limit and prevents interest charges, while any unpaid balance will incur interest.

Many credit cards are designed for different lifestyles and come with perks like cashback, or reward points on purchases. They offer convenience and flexibility but require careful use to avoid debt and high interest.

BPI offers a range of credit cards tailored to your lifestyle—explore and find the one that suits you best.