Okay kiddo, a cardinal is a special kind of person who helps the Pope run the Catholic Church. They wear red robes and hats so they stand out and people know they are important.
Now, a lay cardinal is a regular person who is given this special position. Normally only bishops and priests can become cardinals, but sometimes the Pope decides that someone who is not a bishop or priest is really special and deserves to be a cardinal too.
It's kind of like getting a gold star at school but instead of being for doing good on a project, it's for being an amazing person who helps the church in an important way.