NJ5011
In this scripture, Paul explains the difference between Faith and Works.
If you read the surrounding scriptures, you will see it. When a slave receives wages for his work, the wage is not a gift, but an amount that is due to him by his master.
However, salvation and grace is a gift, not a wage that we receive due to our works. So even though a person may work to back up his faith, the credit for his saving goes to his faith and not the works that he did.
Abraham did lot of works in obedience to God and because of his love for him, like leaving his home and personal luxuries behind, circumcising the male members of his family, readiness to sacrifice Isaac, etc. However, the credit for his righteousness did not go to this works, but to his Faith - Genesis 15:6.
To understand this, take the example of a husband and wife who are celebrating their 50th marriage anniversary. When the husband gifts something expensive to his loving wife, he is not paying her for all the dishes and clothes that she washed, the food that she cooked for the last 50 years, etc. She is not a maid. He gifts her for being faithful and loving throughout the years. Similarly, God gifts us with salvation not because we have worked for him, but because we showed love and faith while doing those works.