- Definition
A credit card lets you buy things now even if you don't have the money, because the bank lends it to you. You have to pay the bank back later, usually with extra money called interest.
If you buy a $100 jacket with a credit card and don't pay the full amount back, you will be charged interest on the unpaid balance.
How to teach this in 30 seconds
Try this analogy: Using a credit card is like a friend paying for your snack now, but you have to pay them back later, and if you're late, you owe them a little extra.
Ask your child: How could a $50 purchase on a credit card end up costing more than $50?
Common mix-up: Kids often confuse credit cards with debit cards. A debit card uses your own money, while a credit card is a loan that you must pay back.
Examples
- Using a credit card to pay for a family's groceries at the store.
- Earning 1% cash back means if you spend $100, the credit card company gives you $1 back.
- Paying a monthly subscription for a streaming service automatically with a credit card.
credit card is a term used in Ontario’s Kindergarten to Grade 8 curriculum.
Where this shows up
The descriptions on this page are SmartStudy’s own original, plain-language writing — not the Ministry’s wording. They are aligned to the Ontario Curriculum, © King’s Printer for Ontario. For the Ministry’s official wording, see the source link below. SmartStudy is an independent service and is not affiliated with, endorsed by, or sponsored by the Government of Ontario or the Ministry of Education. Ontario Curriculum and Resources ↗
