Hi @hannah, launch credits, as the name tells are the credits given to an instance during launch. For example, a t2.micro instance has 1 vCPU and gets 30 launch credits. These launch credits are given to allow instances to burst immediately after the launch.
AWS provides credits that can be earned by using various best practices to avoid huge bills. Have a look at this for understanding better about the aws credits: https://aws.amazon.com/awscredits/