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What is a credit card, and how does it work?

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A man holding up a gold card with the title "What is a credit card and how does it work?"

Arnel Alinea

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Bridget gets to know her new co-host Ryan, who has a lot of fun ideas but doesn’t know much about money. They’ll work together on a question that quite a few listeners were wondering about: What are credit cards, besides little pieces of plastic with chips in them? Together, we’ll learn how grownups use credit cards in the first place, and some potential pitfalls of swiping. Then things really get out of hand when the ghost pirates show up.

Arnel Alinea

And now … tips for grown-ups listening to “Million Bazillion” with kids

Money Talks

Credit and credit cards are a complicated topic, so here are some questions to find out what your child has learned so far:

  1. Why would someone want a credit card? In this episode, we saw some responsible and not-so-responsible uses. Can you think of more?
  2. Ghost Blackbeard stole Bridget and Ryan’s card and went on a spending spree. What happens when a credit card gets stolen?
  3. Credit card companies charge “interest” if you don’t pay your full credit card bill at the end of the month. What is interest?
  4. Credit card users get a “score,” showing how responsible they are with credit. Why is that score important in the future?

Tip Jar

Parents, here are some ways you can keep the conversation about credit cards going at home. This time, we have help from Joyce Serido, an associate professor and financial expert at the University of Minnesota. She offered these tips that work for credit card users of all ages:

Gimmie Five

If this week’s show felt too complex for your kid, that’s OK! Our free email newsletter course, Million Bazillion Academy, is a great way to build saving and smart shopping fundamentals. Each lesson is tied to an episode of our show and comes with an activity that lets kids apply what they’ve learned in the real world.

Finally, we’d love to hear your kids’ money jokes, money poems and best money tips so we can feature them on the podcast! Send them to us using this online form.

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