Credit Basics

Credit is the term used to describe a transaction in which a person receives merchandise, money or services for little or no money up front, but promises to pay an agreed upon amount of money, in an agreed upon amount of time in the future. Usually, the person or company that gives credit to a person charges a fee for providing the service.

Without credit, a consumer would have to save the full cash payment to make major purchases such as household appliances, a car or a house. Credit helps consumers improve their lives and empower themselves to strive for greater financial wellbeing.

Credit creates benefits that help society at large. By providing credit to consumers, businesses are able to sell more goods and services. This creates more jobs and helps the economy grow.