Skip to main content
FamConnect
GuidesCalculatorsGlossaryPricingLog in
Home / Glossary / Family finances

credit card

A buy-now-pay-later payment tool whose bill is paid off each month.

What it means

A credit card is a payment tool that lets the holder shop first and pay later according to the monthly bill. The cardholder is given a certain credit limit by the issuer. If the bill is not paid in full when due, there will be interest and additional fees.

Why it matters for families

A credit card can make payments easier and help track spending, but it can also trigger spending beyond one's means. Families need to distinguish between a payment tool and extra income. If the bill is only partially paid over and over, interest can pile up and strain the budget.

Example

For example, a credit limit of Rp5 million and the family spends Rp1.5 million in a month. If the bill is paid in full when due, there is no interest. But if only the minimum payment is made, the remaining bill will accrue interest and add to next month's burden.

Common misunderstanding

Some people think a credit card is extra money. In fact, it is debt that must be repaid, often with interest if paid late or underpaid.

Related terms

  • minimum paymentThe smallest amount that must be paid so a credit card is not considered overdue.
  • debt ratioThe comparison of total installments to monthly income.
  • online loanAn app-based loan whose license and interest must be checked before use.
  • family budgetA plan for dividing monthly income into spending categories before the money is spent.

Definitions in this glossary are educational. For documents that are legally or financially binding, confirm with the party that issued them.

FamConnect

A warm space for your family tree, moments, and stories worth keeping.

Read

  • All guides
  • Family calculators
  • Term glossary
  • Children's education fund
  • Emergency fund

Product

  • Pricing
  • Changelog
  • Privacy
  • Terms

The calculators and guides here are educational and are not personal financial or legal advice.