Common Contracts

Contract

December 2nd, 2010

• Filed
  December 2nd, 2010

Credit is a common term in economics, commerce and finance. In commerce, it is one of the fundamental accounting concepts along with debit. Both credit and debit are the bookkeeping entries in commerce, while in economics and finance, credit is the money or wealth which is made available for borrowing. It is a type of legal contract or agreement, where one party receives resources or loans from another party with a commitment or obligation to a pay the sum at a future stipulated date, along with the interest rate. To put it in a more simplified manner, credit can be an agreement for deferred payment as well as the terms and conditions associated with such an arrangement. The party which has borrowed money or resources is known as 'debtor' or 'borrower', while the party which makes the resources available for borrowing is called 'creditor' or 'lender'.