Credit
What is credit?
Credit is an agreement between two parties in which on party lends money or provides goods or services to another party with the understanding that payment will be made at a later date.
What is closed-end credit?
Closed-end credit is a loan for a specific amount that must be repaid with interest by a specific date or according to a specified schedule.
What is consumer credit?
Consumer credit is credit granted to individual consumers by a retail business.
What is a principal?
The principal is the amount of money borrowed.
What is trade credit?
Trade credit is a business granted a line of credit to another business for a short period of time to purchase its goods and services.
What is finance charge?
Finance charge is the total amount paid by a borrower to lender for the use of credit.
What is business credit?
Business credit is granted to a business by a financial institution or another company.
What is open-end credit?
Open-end credit is an agreement that allows the borrower to use a specific amount of credit over a period of time.
What does credit provide?
Ability to use good and services as they are being paid for, Opportunity to buy costly items, Source of funding for emergency or unexpected expenses, Convenience of carrying a credit card instead of cash or checkbook.