Credit is defined as the ability to obtain goods or services before payment, based on the trust that full payment will be made in the future, usually with interest. When you owe money as a result of using credit, you are in debt.
In this lesson, you will learn why people use credit, how much it costs to use it, and what types of credit are out there.
After completing this lesson, you will be able to
- define credit,
- recognize what interest is and how it affects the cost of items you purchase with credit, and
- differentiate between secured and unsecured credit.