Which type of card allows a consumer to pay for goods or services on credit?

A credit card is designed specifically to allow consumers to purchase goods and services on credit, enabling them to borrow funds from a credit issuer up to a certain limit. This means that when a consumer uses a credit card, they are essentially taking out a loan that they agree to pay back, typically with interest, if the balance is not paid in full by the due date. This feature is what separates credit cards from other types of payment cards.

In contrast, a charge card requires the user to pay the entire balance due each billing cycle without the option to carry a balance forward, although it functions similarly to a credit card in allowing purchases on credit. A debit card is linked directly to the consumer's bank account, meaning that purchases are deducted instantly from available funds rather than providing a credit line. Finally, a prepaid card allows users to load a specific amount of money onto the card ahead of time, which can then be spent until the balance reaches zero, but it does not allow for borrowing or credit. Thus, the credit card is the only option that permits consumers to spend beyond their immediate cash on hand, reflecting its fundamental role in personal finance management.