What is Credit?
With the invention of the credit card and the internet, we now have a much clearer picture of what Credit is. Credit cards have been around for centuries and have changed our lives in every way possible.
Whether you use a debit card to pay for your gasoline at the pump or are the proud owner of a Visa or MasterCard, you have essentially joined the millions who use a credit card, even if only in small ways.
Credit is quite simply, a document of account
This document contains detailed information about a person’s spending habits. It’s like a credit report that you can request once every twelve months and view at any time.
One thing that you should know about Credit is that it is not something that is given to us and is in fact very rare. Credit is usually paid for.
When we use a credit card, the lender pays the company that issues the card, and the company then pays the consumer. This type of transaction makes the lender somewhat immune to blame because the consumer pays.
What is Credit then? In essence, it is an agreement made between a buyer and a seller, where each party makes an upfront payment and in return receives an agreed-upon sum of money.
When was the first time you heard of credit?
It was a lot earlier than you might think, and the idea behind Credit was to reward good behavior and build better businesses.
Of course, with Credit comes the risk of poor behavior. When a business loses money because of a bad decision made by its customers, it can be forced to declare bankruptcy, which will render that company out of business.
Credit was born in the 19th century, a lot has changed. Companies have gone from being local stores to global corporations that span the globe. Credit is what the new age economy uses to keep track of how well a company is doing, and whether or not they are doing the things that they promised to do.
So, what is Credit?
Just as credit cardholders say that they have nothing to hide, and they do not expect a third party to look at their credit report, everyone has to play their part in the Credit process.
And the first step that a business must take is to apply for a credit report. Having a decent credit score will help you get your next job, or better yet, get that raise you’ve been yearning for.
A person should always think twice before asking to apply for a Credit card because it has to be someone that you trust. A personal loan can often be taken out, but with credit terms often being higher, you’ll probably end up paying back more than what you borrowed.
We are living in a Credit society, and it will never be anything other than that. For the first time in human history, every one of us has access to Credit, and the worst that can happen is that it will be used appropriately.