Nov 12, 2025

Credit

• Credit is the ability to borrow money now and pay it back later, usually with interest.

How do I remember it?

• Think of Credit as "“Credit = Borrow now, pay later.”

Real world example

• Credit Card

You buy groceries for $50 using a credit card.

The credit card company pays the store for you, and you promise to pay the credit card company back later.

If you wait too long, they charge interest.

• Car Loan

You want a $10,000 car.

You take a loan (credit), get the car today, and then repay the bank monthly.

• Phone Plan

Many phone companies give you a phone “for $0 down.”

They are giving you credit—you get the phone today and pay it off over time.