I don't know how credit works at alll can someone explain how it does..

Simple really, You want to buy something and do not have enough cash for the item. So the seller gives you the item with your promise to pay him in the future. OF course he also expects some interest also as a hedge against those that promise but do not pay.

I have to partially disagree with 450donn. Credit has been around for a very long time. What's involved is there are two sides to a credit transaction. On one side is an entity who has money and wants earn a return on that money. The other side is someone without money, but who needs more money than they have for some purpose (usually a purchase of something).

So the person who needs the money goes to the person who has the money and signs a contract to borrow the money and pay a fee for the use of the money. This is called the interest.

The interest is what the lender earns for the use of the money. And the reason they lend. The advantage to the borrower is that they can have the use of what they want to purchase before they actually have the money.

My take:

Credit is the process by which people spend money they don't have on things they can't afford so they can enjoy them briefly and then be miserable forever trying to catch up with the hole of debt they add to month after month after month.

Credit is the technique by which banks take possession of a portion of your paychecks forever.

Basically credit is where you get a certain amount of money to spend (aka a "line of credit") I wouldn't recommend getting more than one credit card because you usually spend more than you can pay back : \... basically anytime you want a car, house, or even a better job they are going to look at your credit so be careful on what you buy and who you get your credit cards from. What I did to start was bought a cheap ($100) piece of jewelry got a card and paid it off in a timely manner and I have good credit! I hope that helps!