What is a credit card primarily used for?

The primary function of a credit card is to enable consumers to make purchases immediately and defer payment for them to a later date. This allows cardholders to buy goods and services without needing the immediate funds available in their bank accounts, making it a convenient financing option for both planned and unplanned expenses.

When a purchase is made using a credit card, the card issuer pays the merchant on behalf of the cardholder. The cardholder is then required to repay the card issuer either in full or in part during the next billing cycle. This flexibility gives consumers the option to manage their cash flow more effectively.

The other choices do not reflect the main purpose of a credit card. For instance, making cash transactions typically requires physical cash or a debit card rather than credit. Paying for purchases immediately contradicts the essence of credit-based transactions, as doing so would rather imply using available funds directly. Earning interest on balances can occur if the cardholder carries a balance and does not pay it off in full, but this is not the primary intent of using a credit card; rather, it is a consequence of failing to pay on time.