Definition of

Credit

Credit
Credit is the trust that lets people give things (like goods, services or money) to other people in the hope they will repay later on.

Example:
Dale has a watch worth $50, and Jade wants it.
But Jade can't pay straight away, so Dale lets Jade have the watch on $50 credit.
Now Jade has the watch, and a $50 debt to Dale.

Example: Banks will often let people borrow money through a "credit card" or a "line of credit" in the hopes the person will pay it back. The bank will usually charge interest.

If you have money in the bank it is your credit (you trust the bank will pay it to you when needed) and the bank will usually pay you interest.


Credit is also the name given by accountants to an amount received: the opposite of debit.
 
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