A lender or creditor is the person or business to whom the money is owed. The borrower or debtor is the person who owes the money. In its simplest terms, credit allows a consumer to use goods or services in the present, and holds the consumer responsible for paying for them in the future. Families headed by younger persons use credit cards more than families headed by older persons. Young families with children have the greatest credit use.
Credit offers convenience over the use of cash or a check.
When using credit for the convenience of taking advantage of a sale, it is important to pay the balance in full when the bill is due. Stringing the payments out for several months will add finance charges that could negate the value of the sale. It is difficult to get ahead financially if dollars must be spent to repay debt built up as a result of credit overuse. However, borrowing for an emergency can be an acceptable use of credit when the expense of an actual emergency exceeds the amount budgeted for same. Repeated use of credit for such expenses over a short period should signal a problem to the credit user.