Credit in terms of purchasing things can be thought of as a pool of money a bank has set aside for you to spend, and in return you will replenish that pool of money. When a bank sets you up with a credit card, they are giving you a line of credit. A line of credit is that pool of money that you can spend as you see fit, with the promise to pay back that money. Credit differs from cash. Cash you have in your pocket and you can spend only the maximum amount of cash you have. Credit gives you access to a pool of money you can spend. When you spend that money, you will have a credit balance, or amount of cash you owe. When you buy things on credit you are promising to pay back the credit company (bank) for the amount you spend. You do not need to pay back your entire line of credit back all at once. You can pay back in small payments over time to replenish that pool of money. However, this is where the issues begin for many people around the globe and is important to understand. If you do not replenish your pool of money, or pay back your balance in a timely manner, you will begin to see fees associated with those payments, let us get into that next