Credit is using goods and services for which payment is made later. Credit enables a person to obtain goods and services or money now in exchange for the promise he makes to pay later. It is considered as the present use of future income for buying goods or services. Like cash, credit is considered as a medium of exchange. Goods are bought and sold on credit basis, where immediate payments are not made. The examples of service credit are the use of electricity, telephone, etc. where a person or a family uses these services but payment for these services is made after a month or so when the monthly bill is received. Purchase of goods from a shopkeeper can be made without immediate payment but promise to pay later for goods to the shop keeper and goods are delivered to the buyer immediately.
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