Buying On Credit Meaning
Definition: To purchase something with the promise that you will pay in the future.
When buying something on credit, you acquire the item immediately, but you pay for it at a later date. This is a common practice that business owners us to encourage people to come into their stores, even people who don’t actually have the money.
It is a very old idea that has only grown over time, and, today, it is a common way to pay for anything from big purchases to small items and groceries. With the advent of the credit card, even those people with sufficient funds will purchase items on credit, and they will pay off their bill each month.
Origin of Buying On Credit
The concept of credit itself is an old one. In fact, people have been buying things on promises since the dawn of trade, and the profession of being a creditor is as old as the mid-1400s. The word comes from the Latin creditum, which meant a loan, thing entrusted to another.
In the late 1800s, stores had already begun to advertise, “Buy now and pay when you can!” In 1906, we can see an example in The Lancaster News of liquor being bought on credit,
- The old board of directors of the state dispensary has loaded down the state with about $700,000 worth of liquor bought on credit in open and direct violation of the law.
Examples of Buying On Credit
In the modern heyday of credit cards, it is extremely common to buy something on credit.
Steve: How could you afford that new computer?
Mark: I bought it on credit; I don’t have to pay for another 90 days.
It can also be used as a warning:
- Paul really should stop buying things on credit; he doesn’t have the income to pay it all back.
More Examples
- She tugged 13 envelopes from a cabinet above the stove, each one labeled with a different debt: the house payment, the student loans, the vacuum cleaner she bought on credit. –Chicago Tribune
- He is surviving on food bought on credit from the local provision store; the debt is now over Rs 1,200. –Business Today
Summary
To buy something on credit means to possess an item immediately but pay for it at a later date.
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