Get Credit Cards in best Price
At its core, credit is a promise. It’s an agreement where one party, the borrower, receives money or something valuable and agrees to pay it back later, usually with a little extra (interest) as a thank-you to the lender. Credit can also reflect the trustworthiness or credit history of a person or business. Having good credit shows lenders you’re reliable and have a solid track record of paying back what you owe. This reputation can make it easier to secure loans, like a mortgage, and help you snag the best interest rates.
In accounting, credit has another role—it’s an entry in the books that shows an increase in liabilities or a decrease in assets.
(Scroll down and choose your card)
Key Points to Remember:
- Credit is basically an agreement between a lender and a borrower.
- It can also indicate a person’s or business’s reputation for paying back debts.
- In accounting, credit is a type of bookkeeping entry, paired with a debit
Credit in Lending and Borrowing
When you get credit, you’re entering into a deal with a lender who’s trusting you’ll pay them back. This arrangement can take many forms: car loans, home mortgages, personal loans, or a line of credit. When a bank or other institution lends you money, it “credits” your account, expecting repayment by a certain date.
Credit cards are another common form. Here, your credit card issuer pays the merchant on your behalf, and you repay the issuer over time, usually with interest if you don’t pay off the balance right away. There’s also something called “trade credit,” where, for example, a restaurant might receive goods from a supplier who sends a bill a month later—this delayed payment setup is a type of credit too.
Axis Bank
Axis Magnus Credit Card - India's most rewarding credit card for travel, food and online shopping!
AU LIT Credit Card
AU LIT Credit Card - Customizable credit card based on your lifestyle and usage!
AU LIT Credit Card
AU LIT Credit Card - Customizable credit card based on your lifestyle and usage!
Swiggy HDFC Credit Card
Swiggy HDFC Credit Card
SBI Simply Click Credit Card
SBI Simply Click Credit Card - An entry level credit card designed for internet purchases
Axis MyZone Credit Card
Axis MyZone Credit Card - Entry level card offering benefits across Shopping, Dining and Entertainment!
IDFC FIRST Credit Card
IDFC FIRST Credit Card - 300+ Merchant offers & dining discounts all year long!
HSFC Bank
SBI Cashback Credit Card
HSBC Live Plus Credit Card
HSBC Live Plus Credit Card - One of the best cashback credit cards in India!
HDFC Shoppers
SBI BPCL Credit Card
SBI BPCL Credit Card
AU Altura Credit Card
AU Altura Plus Credit Card
AU Altura Plus Credit Card - Enjoy the limitless spending and wide variety of benefits!
Axis Airtel Credit Card
Axis Airtel Credit Card - Seamless Connections, Superior Rewards Await!
IndusInd Legend Credit Card
IndusInd Legend Credit Card - Experience the best of travel, dining and shopping!
Hdfc bank
Axis Flipkart Credit Card
Axis Flipkart Credit Card - Enjoy accelerated cashback across all your favourite categories!
HDFC bank
Axis Indian Oil Rupay Credit Card
Axis Indian Oil Rupay Credit Card - Credit card that offers higher rewards on your fuel transactions!
AU Swipe–Up Platform
Credit in Accounting
In accounting, credit isn’t about borrowing money—it’s a way to record certain types of transactions. When a company buys products on credit, its inventory (an asset) goes up while accounts payable (a liability) also rises. This system helps keep financial records accurate and clear.
Your Credit Score: What Goes into It
Your credit score is a snapshot of your financial habits and history. It’s influenced by five main factors: your history of payments, how much credit you’re using, the length of your credit history, your mix of credit types, and any recent applications. Improving your score can take time, but regularly paying bills on time and keeping your credit usage low are great ways to boost it.
Common Credit Terms Explained
- Letter of Credit: Often used in international trade, this is a bank’s guarantee to pay a seller if the buyer doesn’t come through by an agreed date.
- Credit Limit: This is the maximum amount a lender (like a credit card company) will let you borrow. You’ll need to repay some of it before making more purchases if you reach the limit.
- Line of Credit: A flexible loan that allows you to draw money as needed, up to a set limit. A home equity line of credit (HELOC) is a common example.
- Revolving Credit: With no fixed end date, this credit (like credit cards) allows borrowing up to a limit, which replenishes as you pay down the balance.
Tips to Improve Your Credit
Improving your credit takes time and consistency. Pay down your debt, keep your balances low, pay bills on time, and avoid opening new lines of credit unless necessary.
The Bottom Line
Credit plays a huge role in personal and business finances. Most often, it means you can buy now and pay later, making it easier to manage expenses. Credit arrangements keep commerce flowing smoothly, helping individuals, businesses, and even governments meet their financial goals.