What is credit?
As you start earning and managing your own money, one milestone you’re likely to come across is credit.
‘Credit’ is when an organisation or person (known as a ‘lender’) gives you money, goods or services up front, and you pay later according to agreed terms. Many lenders add a charge called ‘interest’ to what you repay. Types of credit include:
- Mobile phone contracts
- Credit cards
- Store cards
- Mail order accounts
- Some utility accounts such as energy, water and broadband