Dictionary:

credit

  (krĕd'ĭt)

1. Belief or confidence in the truth of something. See synonyms at belief.
2. A reputation for sound character or quality; standing: It is to their credit that they worked so hard without complaining.
3. A source of honor or distinction: This exceptional athlete is a credit to our team.
4. Recognition or approval for an act, ability, or quality: gave them credit for a job well done.
5. Influence based on the good opinion or confidence of others.
6. An acknowledgment of work done, as in the production of a motion picture or publication. Often used in the plural: At the end of the film we stayed to watch the credits.
7. 1. Official certification or recognition that a student has successfully completed a course of study: He received full credit for his studies at a previous school.
   2. A unit of study so certified: This course carries three credits.
8. Reputation for solvency and integrity entitling a person to be trusted in buying or borrowing: You should have no trouble getting the loan if your credit is good.
9. 1. An arrangement for deferred payment of a loan or purchase: a store that offers credit; bought my stereo on credit.
   2. The terms governing such an arrangement: low prices and easy credit.
   3. The time allowed for deferred payment: an automatic 30-day credit on all orders.
10. Accounting.
    1. The deduction of a payment made by a debtor from an amount due.
    2. The right-hand side of an account on which such amounts are entered.
    3. An entry or the sum of the entries on this side.
    4. The positive balance or amount remaining in a person's account.
    5. A credit line.

1. To believe in; trust: “She refused steadfastly to credit the reports of his death” (Agatha Christie).
2. 1. To regard as having performed an action or being endowed with a quality: had to credit them with good intentions.
   2. To ascribe to a person; attribute: credit the invention to him. See synonyms at attribute.
3. Accounting.
   1. To enter as a credit: credited $500 to her account.
   2. To make a credit entry in: credit an account.
4. To give or award an educational credit to.
5. Archaic. To bring honor or distinction to.

[French, from Old French, from Old Italian credito, from Latin crēditum, loan, from neuter past participle of crēdere, to entrust.]

A monetary amount that is added to an account balance. A credit to one account is a debit to another. See debit.

1. A contractual agreement in which a borrower receives something of value now, with the agreement to repay the lender at some date in the future. Also, the borrowing capacity of an individual or company.

2. An accounting entry system that either decreases assets or increases liabilities.

Investopedia Says:
2. The opposite transaction is a debit.

Related Links:
Do you know how your borrowing activities affect your credit rating? Find out here. The Importance of Your Credit Rating

Faith, from the Latin credito. An agreement by which something of value-goods, services, or money-is given in exchange for a promise to pay at a later date.

Banking:

1. Lender's agreement to advance funds, based on an estimation that the debt will eventually be repaid, or to refrain from collecting a previously existing debt, as in a refinancing.

Bank credit is classified by: type of borrower, for example, loans to consumers (mortgages, auto loans, credit cards) as opposed to loans to businesses (commercial lines of credit, working capital loans); type of collateral pledged, if any; and terms of repayment. Some bank loans are repaid according to a fixed schedule, for example, a 30-year mortgage; others such as a Demand Loan to a business that may be called at any time by the lender.

2. Used by bank credit analysts and lenders instead of Borrower or Loan. A lender might say, "I'll approve the credit if it's a four-year loan," or "I think the credit is good."

3. Bookkeeping entry representing a deposit of funds into an account. In accounting, a credit entry notes an increase in liabilities, owner's equity, and revenues, and a decrease in assets and expenses. Contrast with Debt. See also Ability to Pay; Closed-End Credit; Credit Enhancement; Credit Line; Credit Rating; Credit Report; Credit Risk; Equal Credit Opportunity Act; Extension Agreement; Fair Credit Billing Act; Fair Credit Reporting Act; Forbearance; Installment Credit; Line of Credit; Open-End Credit; Regulation B; Regulation G; Regulation T; Regulation Z; Revolving Credit; Secured Loan; Usury.

1. In finance, the availability of money.
Example: When money and credit are readily available, it is easier to buy real estate. Credit policy is determined to a large extent by the Federal Reserve System.

2. In accounting, a Liability or Equity entered on the right side of the ledger.
Example: In Closing Statements the credit column shows what is due and payable. The buyer is credited with amounts paid; the seller is credited with the price of the real property and prepaid items.

Credit is a transaction between two parties in which one, acting as creditor or lender, supplies the other, the debtor or borrower, with money, goods, services, or securities in return for the promise of future payment. As a financial transaction, credit is the purchase of the present use of money with the promise to pay in the future according to a pre-arranged schedule and at a specified cost defined by the interest rate. In modern economies, the use of credit is pervasive and the volume enormous. Electronic transfer technology moves vast amounts of capital instantaneously around the globe irrespective of geopolitical demarcations.

In a production economy, credit bridges the time gap between the commencement of production and the final sale of goods in the marketplace. In order to pay labor and secure materials from vendors, the producer secures a constant source of credit to fund production expenses, i.e., working capital. The promise or expectation of continued economic growth motivates the producer to expand production facilities, increase labor, and purchase additional materials. These create a need for long-term financing.

To accumulate adequate reserves from which to lend large sums of money, banks and insurance companies act as intermediaries between those with excess reserves and those in need of financing. These institutions collect excess money (short term assets) through deposits and redirect it through loans into capital (long term) assets.

Reasons for Purchasing Credit

In a production economy, credit is widely available and extensively used. Because credit includes a promise to pay, the credit purchaser accepts a certain amount of financial and personal risk. Three strategies summarize the reasons for purchasing credit:

1. The lack of liquidity prevents profitable investments at advantageous times.
2. Favorable borrowing costs make it less expensive to borrow in the present than in the future. Borrowers may have expectations of rising rates, tight credit supplies, growing inflation, and decreasing economic activity. Conversely, profit expectations may be sufficiently favorable to justify present investments that require financing.
3. Tax incentives, which expense or deduct some interest costs, decrease the cost of borrowing and assist in capital formation.

Uses for Credit

A debtor accepts the risks of borrowing to secure something of value, whether perceived or real, profitable or neutral. Borrowing extends one's purchasing power and ability to invest in capital assets to build wealth. But credit is not only used to produce wealth; credit may be necessitated by psychological and cultural factors as well. The following are some of the most common reasons for using credit:

Enjoyment. Credit has come to finance the enhancement of one's life style or quality of life through activities and purchases for enjoyment. Activities "profitable" to one's well being may translate into a more productive economic life. Enjoyment includes the financing of a boat, an education, a vacation, a health club membership, a retreat, etc.

Utilitarian consumption. With the introduction of credit cards in the 1950s and the increase of home equity debt in the 1980s, the financing of daily consumption has greatly expanded. In fact, consumer credit in 1990 was four times that of 1975. Much of this debt was for convenience purchases, consumer goods, and services with a life of less than one year.

Profit and wealth building. The profit incentive plays an important role in the accumulation of capital assets and in wealth building not only for companies—which increase profits through the introduction of capital improvements that must be financed over the long-term—but also for individuals. Home buyers use a similar rationale when buying a house. They expect the purchase of a certain house in a certain location to be more "profitable" than renting or purchasing another house elsewhere. Although a home is not a factory, it is the production backdrop for the capitalist employee selling labor and services.

Promise to Pay

The credit contract defines the terms of the agreement between lender and borrower. The terms of the contract delineate the borrower's obligation to repay the principal according to a schedule and at a specified cost or interest rate. The lender reserves the right to require collateral to secure a loan and to enforce payment through the courts.

The lender may levy a small charge for originating or participating in a loan placement. This charge, measured in percentage points, covers administrative costs. This immediate cash infusion decreases the costs of the loan to the lender, thereby reducing the risk. The lender may also require the borrower to provide protection against nonpayment or default by securing insurance, by establishing a repayment fund, or by assigning collateral assets.

A promissory note is an unconditional written promise to pay money at a specified time or on demand. The maker of the note is primarily liable for settlement. No collateral is required. A lien agreement, however, holds property as security for payment of debt. A specific lien identifies a specific property, as in a mortgage. A general lien has no specific assignment.

Credit Terms

The terms of the credit contract deal with the repayment schedule, interest rate, necessity of collateral, and debt retirement.

REPAYMENT SCHEDULES. Credit contracts vary in maturity. Short-term debt is from overnight to less than one year. Long-term debt is more than one year, up to 30 or 40 years. Payments may be required at the end of the contract or at set intervals, usually on a monthly basis. The payment is generally comprised of two parts: a portion of the outstanding principal and the interest costs. With the passage of time, the principal amount of the loan is amortized, or repaid little by little, until completely retired. As the principal balance diminishes, the interest on the remaining balance also declines. Interest on loans do not pay down the principal. The borrower pays interest on the principal loan amount and is expected to retire the principal at the end of the contract through a balloon payment or through refinancing.

Revolving credit has no fixed date for retirement. The lender provides a maximum line of credit and expects monthly payment according to an amortization schedule. The borrower decides the degree to which to use the line of credit. The borrower may increase debt anytime the outstanding amount is below the maximum credit line. The borrower may retire the debt at will, or may continue a cycle of paying down and increasing the debt.

INTEREST RATES. Interest is the cost of purchasing the use of money, i.e., borrowing. The interest rate charged by lending institutions must be sufficient to cover operating costs, administrative costs, and an acceptable rate of return. Interest rates may be fixed for the term of the loan, or adjusted to reflect changing market conditions. A credit contract may adjust rates daily, annually, or at intervals of three, five, and ten years.

COLLATERAL. Assets pledged as security against loan loss are known as collateral. Credit backed by collateral is secured. The asset purchased by the loan often serves as the only collateral. In other cases the borrower puts other assets, including cash, aside as collateral. Real estate or land collateralizes mortgages.

Unsecured debt relies on the earning power of the borrower. A debenture is a written acknowledgment of a debt similar to a promissory note in that it is unsecured, relying only on the full faith and credit of the issuer. Corporations often issue debentures as bonds. With no collateral, these debentures are subordinate to mortgages.

A bond is a contract held in trust obligating a borrower to repay a sum of money. A debenture bond is unsecured, while a mortgage bond holds specific property in lien. A bond may contain safety measures to provide for repayment. An indenture is a legal document specifying the terms of a bond issue, including the principal, maturity date, interest rates, any qualifications and duties of the trustees, and the rights and obligations of the issuers and holders. Corporations and government entities issue bonds in a form attractive to both public and private investors.

DEBT RETIREMENT. Overnight funds are lent among banks to temporarily lift their reserves to mandated levels.

A special commitment is a single purpose loan with a maturity of less than one year. Its purpose is to cover cash shortages resulting from a one-time increase in current assets, such as a special inventory purchase, an unexpected increase in accounts receivable, or a need for interim financing.

Trade credit is extended by a vendor who allows the purchaser up to three months to settle a bill. In the past it was common practice for vendors to discount trade bills by one or two percentage points as an incentive for quick payment. A seasonal line of credit of less than one year is used to finance inventory purchases or production. The successful sale of inventory repays the line of credit. A permanent working capital loan provides a business with financing from one to five years during times when cash flow from earnings does not coincide with the timing or volume of expenditures. Creditors expect future earnings to be sufficient to retire the loan.

Commercial papers are short-term, unsecured notes issued by corporations in a form that can be traded in the public money market. Commercial paper finances inventory and production needs. A letter of credit ("l/c") is a financing instrument that acts more like credit money than a loan. An l/c is used to facilitate a transaction, especially in trade, by guaranteeing payment at a future date. Unlike a loan, which invokes two primary parties, an l/c involves three: the bank, the customer, and the beneficiary. The bank issues, based on its own credibility, an l/c on behalf of its customer, promising to pay the beneficiary upon satisfactory completion of some predetermined conditions. A bank's acceptance is another short-term trade financing vehicle. A bank issues a time draft promising to pay on or after a future date on behalf of its customer. The bank rests its guarantee on the expectation that its customer will collect payment for goods previously sold.

Term loans finance the purchase of furniture, fixtures, vehicles, and plant and office equipment. Maturity generally runs more than one year and less than five. A large equipment purchase may have longer terms, matched to its useful production life. Mortgage loans are used to purchase real estate and are secured by the asset itself. Mortgages generally run 10 to 40 years. When creditors provide a mortgage to finance the purchase of a property without retiring an existing mortgage, they wrap the new mortgage around the existing debt. The interest payment of the wraparound mortgage pays the debt service of the underlying mortgage.

Treasury bills are short-term debt instruments of the U.S. government issued weekly and on a discounted basis with the full face value due on maturity. T-bill maturities range from 91 to 359 days and are issued in denominations of $10,000. Treasury notes are intermediate-term debt instruments ranging in maturity from one to ten years. Issued at par, full face value, in denominations of $5,000 and $10,000, T-notes pay interest semiannually. Treasury bonds are long-term debt instruments. Issued at par values of $1,000 and up, T-bonds pay interest semiannually, and may have call dates (retirement) prior to maturity.

Credit Worthiness

The granting of credit depends on the confidence the lender has in the borrower's credit worthiness. Generally defined as a debtor's ability to pay, credit worthiness is one of many factors defining a lender's credit policies. Creditors and lenders utilize a number of financial tools to evaluate the credit worthiness of a potential borrower. Much of the evaluation relies on analyzing the borrower's balance sheet, cash flow statements, inventory turnover rates, debt structure, management performance, and market conditions. Creditors favor borrowers who generate net earnings in excess of debt obligations and contingencies that may arise. Following are some of the factors lenders consider when evaluating an individual or business that is seeking credit:

Credit worthiness. A history of trustworthiness, a moral character, and expectations of continued performance demonstrate a debtor's ability to pay. Creditors give more favorable terms to those with high credit ratings via lower point structures and interest costs.

Size of debt burden. Creditors seek borrowers whose earning power exceeds the demands of the payment schedule. The size of the debt is necessarily limited by the available resources. Creditors prefer to maintain a safe ratio of debt to capital.

Loan size. Creditors prefer large loans because the administrative costs decrease proportionately to the size of the loan. However, legal and practical limitations recognize the need to spread the risk either by making a larger number of loans, or by having other lenders participate. Participating lenders must have adequate resources to entertain large loan applications. In addition, the borrower must have the capacity to ingest a large sum of money.

Frequency of borrowing. Customers who are frequent borrowers establish a reputation which directly impacts on their ability to secure debt at advantageous terms.

Length of commitment. Lenders accept additional risk as the time horizon increases. To cover some of the risk, lenders charge higher interest rates for longer term loans.

Social community considerations. Lenders may accept an unusual level of risk because of the social good resulting from the use of the loan. Examples might include banks participating in low income housing projects or business incubator programs.

Interest Rates and Risk

Lenders use both subjective and objective guidelines to evaluate risk and to establish a) a general rate structure reflective of market conditions, and b) borrower-specific terms based on individual credit analysis. To be profitable, lenders charge interest rates that cover perceived risks as well as the costs of doing business. The risks calculated into the interest rate include the following.

Opportunity cost risk. The lender fixes interest costs at a level sufficient to justify making a loan in the present rather than waiting for more advantageous terms in the future. The lender focuses on a desired rate of return rather than the credit worthiness of the borrower.

Credit risk or repayment risk. The borrower may not be able to make scheduled payments nor repay the debt at all. The greater the credit risk, the higher the interest rate. Creditors charge lower interest rates to those with the highest credit ratings, and those who are the most able to pay. In other words, those least able to pay find themselves paying the highest rates.

Interest rate risk and prepayment risk. These risks arise when the payment or prepayment of outstanding debt does not match the terms and pricing of current debt, thus exposing the lender to a "mismatch" in the costs of doing business and the terms of lending.

Inflation risk. Inflation decreases the purchasing power of money. Lenders anticipate these losses with higher interest rates.

Currency risk. International trade and money markets may devalue the currency, decreasing its purchasing power abroad even during times of low inflationary expectations at home. Since currency devaluation heightens inflationary expectations in a global economy, interest rates rise.

Financial Intermediation

Financial intermediation is the process of channeling funds from financial sectors with excesses to those with deficiencies. The primary suppliers of funds are households, businesses, and governments. They are also the primary borrowers. Financial intermediaries, such as banks, finance companies, and insurance companies, collect excess funds from these sectors and redistribute them in the form of credit. Financial intermediaries accumulate reserves of funds through investment and savings instruments.

Banks provide savings and checking accounts, certificates of deposit, and other time accounts for customers willing to loan the bank their funds for the payment of interest. Insurance companies gather funds through various investments and through the collecting of premiums. Banks, finance, and insurance companies also raise cash by selling equity positions or borrowing money from private or public investors. Pension funds utilize available funds from participant contributions and from investment earnings. Federally sponsored credit intermediaries capitalize themselves in a manner similar to banks.

Financial intermediation provides an efficient and practical method of redistributing purchasing power to qualified borrowers. Banks aggregate many small deposits to finance a single family home mortgage, for example. Finance companies break large pools of cash down to sizes appropriate for the purchase of an automobile. The pooling of funds from many sources and the distribution of credit to a large number of creditors spreads the risks.

Managers of financial intermediaries also reduce risk by qualifying borrowers, thereby funneling funds into creditworthy situations. Furthermore, financial intermediation increases liquidity in the system, acting as a buffer against cash shortages resulting from unexpected increases in deposit withdrawals.

Credit Securitization

Credit securitization is one of the most recent and important developments in financing and capital formation. Underwriters of financial investments gather together a large number of outstanding credit instruments and other receivables, and repackage them in the form of securities which, to the layperson, are similar to closed-end mutual funds. Underwriters sort the credit instruments into homogeneous groups by maturity, purpose, interest rates, and so forth, and market participation in the cash flow generated by the debt instruments backing these securities. Hence, the term "asset backed securities."

In many instances the underlying debt is mortgages, secured by real estate, and guaranteed by some agency or insurance company. For example, an under-writer may place into securitization only mortgages guaranteed by the Veterans Administration of maturities no less than 20 years, with interest rates of not less than 9 percent, and with a cumulative principal (face) value of $10 million. The underwriter sells shares in this pool of mortgages to the public. Other credit instruments securitized are commercial mortgages, auto loans, credit card receivables, and trade receivables.

Credit securitization supports the viability of financial intermediaries by a) spreading the risk over a broader range of investors who purchase the securities, and b) increasing liquidity through an immediate cash infusion for the securitized debt. This process is also helpful to investors and borrowers alike. The large volume and efficiency of the system puts downward pressure on interest rates. The pooling of loans into large, homogeneous securities facilitates the actuarial and financial analyses of their risks.

Investors may participate in a portion of the cash flow generated by the interest and/or principal payments made by borrowers of the underlying debt. Investor participation may be limited to the cash flow of a set number of years, or to a portion of the principal when the underlying debt is retired. Investors also choose to participate at a point suitable to their risk/reward ratio. Hence, investors have the opportunity to derive different benefits from one package of credit instruments.

Further Reading:

Altman, Edward I., John B. Caouette, and Paul Narayanan. "Credit Risk Measurement and Management: The Ironic Challenge in the Next Decade." Financial Analysts Journal. January-February 1998.

Guttman, Robert. How Credit-Money Shapes the Economy: The United States in a Global System. M.E. Sharpe, 1994.

Heath, Gibson. Doing Business with Banks: A Common Sense Guide for Small Business Borrowers. DBA/USA Press, 1991.

Rosenthal, James A., and Juan M. Ocampo. Securitization of Credit: Inside the New Technology of Finance. Wiley, 1988.

Wray, L. Randall. Money and Credit in Capitalist Economies: The Endogenous Money Approach. Edward Elgar, 1990.

noun

1. Mental acceptance of the truth or actuality of something: belief, credence, faith. See opinion.
2. Favorable notice, as of an achievement: acknowledgment, recognition. See knowledge/ignorance.
3. The act of attributing: ascription, assignment, attribution, imputation. See give/take/reciprocity.

verb

1. To have confidence in the truthfulness of: believe, trust. Idioms: take at one's word. See opinion.
2. To regard as belonging to or resulting from another: accredit, ascribe, assign, attribute, charge, impute, lay, refer. See give/take/reciprocity.

Definition: deferred payment arrangement; assets
Antonyms: cash

n

Definition: recognition; trust
Antonyms: disacknowledgement, disapproval, disbelief, disclaimer, discredit, dishonor, disregard, disrespect

n

Definition: reputation, status
Antonyms: discredit, disrespect, ill repute

v

Definition: accredit, assign to
Antonyms: discredit, renege

v

Definition: believe, depend on
Antonyms: disbelieve, mistrust, not buy, not subscribe

For more information on credit, visit Britannica.com.

There are two primary types of credit: producer credit and consumer credit. Producer credit is extended to businesses; consumer credit is extended to individuals. Credit can be extended long term or short term. Long-term credit generally has a maturity of one year or more.

Businesses seek credit to finance operations or to purchase long-lived assets such as machinery or real estate. A strict accounting may not precede the credit contract, yet businesses are presumed to take profit maximization concerns into account when deciding to borrow.

Individuals seek credit for parallel reasons, although the terminology differs. Businesses finance operations; individuals finance household expenses. Businesses purchase long-lived assets such as machinery or real estate; individuals purchase durable goods or homes. Whereas businesses consider the bottom line, individuals borrow for more complex reasons.

The most important distinction between producer credit and consumer credit is the role of credit in generating the funds with which the debt is repaid. Businesses borrow to produce and sell a product, and thus generate the revenue with which the loan is repaid. Families borrow in order to buy products, not to generate family in-come. This distinction mattered to lenders, especially in the nineteenth and early twentieth centuries. Lenders, particularly bankers, were unwilling to extend credit to individuals to buy consumer goods unless the product would "pay for itself": pianos could be used to give piano lessons and sewing machines could be used to take in sewing, and credit was readily available for families buying these products.

Credit extended to producers or consumers is typically—but not always—a loan. What is and is not a loan is primarily a legal distinction. Most credit—but not all—is secured by a real or financial asset. If the debtor breaches the contract that is secured by property, the creditor (lender) can claim or repossess the property.

Producer Credit

In the United States, the demand for producer credit probably dates back to the day of first settlement. Because the economy had little transportation or manufacturing, demand for producer credit was largely mercantile and agricultural. There were, however, few institutional arrangements that extended credit. What credit existed was usually extended directly by individuals or by merchants.

Borrowers were frequently located long distances from creditors, and often planned to use their borrowings for activities about which the potential creditors had little knowledge. The long physical distances tended to preclude many transactions. The difficulty in evaluating a project's creditworthiness limited credit availability even more. Search, information gathering, and administration are, however, all subject to increasing returns to scale, so that average costs can be substantially reduced if these activities are centralized; moreover, risk is reduced if the benefits of insurance are obtained By the introduction of some institution between lender and borrower.

In 1781, the Bank of North America was chartered in Philadelphia. Commercial banks were soon opened in the other Northeast cities. By 1810 there were 88 banks, and By 1930, 30,000. Early Banks were largely devoted to supplying the credit needs of the mercantile community. They Lent the savings of stockholders and a few depositors, and also issued bank notes in exchange for commercial IOUs (commercial paper). Banks continue to function in much the same way today. After 1865, however, the creation of demand deposits (checking accounts) largely replaced bank note issue as the means of extending credit.

In the nineteenth century, local banks dominated the short-term credit market in the North and West. In the South, credit was provided by a combination of merchants and people in the cotton industry (supported at times by northern banks). Legal restrictions prevented the establishment of national banks. Local banks mobilized credit within regions, but there were few mechanisms to move credit between regions. Demand for finance was high in the South and West but supply was greatest in the East. Commercial paper houses such as Goldman Sachs emerged to facilitate interregional flow of funds. These institutions began operating in the East in the 1840s. They Moved into the Midwest in the early 1870s and to the Pacific coast By the turn of the century. Commercial paper houses bought commercial paper from banks in high-interest regions and sold it to banks in lower-interest areas.

Demand for long-term credit increased in the 1820s, 1830s, and 1840s as canal building dominated transportation firms, factory production emerged in manufacturing firms, and new technology transformed agriculture. Existing commercial banks and new industrial banks such as the Morris Canal and Banking Company were initially able to meet the increased demand for credit. But the loan defaults during the panic of 1837 and depression of 1839–1842 convinced some bankers that long-term loans were unsafe, and commercial banks began to shy away from extending long-term producer credit.

Other institutions emerged as major suppliers of long-term credit. The first savings bank had opened its doors in 1816. The idea spread rapidly; by 1825, most Northeast cities had at least one savings bank. Savings banks were the most important suppliers of long-term credit from the late 1830s until the end of the century. The Bank for Savings of New York City, established in the early 1800s to serve the working poor, made a substantial contribution to the financing of the Erie Canal. The Provident Institution for Savings in Boston was instrumental in financing the New England textile industry. Savings banks, however, held primarily the meager savings of the poor and were never important outside the Northeast.

In the East, Midwest, and South, life insurance companies provided long-term producer credit. Life insurance business first grew substantially in the 1840s, but its fastest growth came after 1870 with the establishment of tontine and industrial insurance. Life insurance companies passed savings banks in importance in the early years of the twentieth century.

As transportation, manufacturing, and government demand for credit increased in the nineteenth century, formal capital markets developed to facilitate the extension of producer credit. The New York Stock Exchange was formally organized in 1817. Local markets soon emerged in eastern seaboard cities such as Boston and Philadelphia. By the 1830s, there were local markets as far inland as St. Louis. Improvements in communication and the financial advantages enjoyed by New York led to centralization of securities exchanges in New York City. The exchanges initially dealt only in public issues but began dealing in transportation securities in the early nineteenth century and in public utilities shortly thereafter. By the end of the nineteenth century, they were handling a substantial volume of manufacturing securities. By 1914, the market was mobilizing credit for all branches of American activity except agriculture. Although the system suffered a temporary setback after the crash of 1929, it rebounded during World War II (1939–1945) and remains an important route for the extension of long-term producer credit.

Consumer Credit

Consumer credit allows individuals to buy goods and services they may not otherwise be able to pay for. The use of credit by individuals is as old as commerce itself. The forms of consumer credit have evolved over time.

Until the late nineteenth century, most consumer credit was extended directly by merchants and service providers, or by pawnbrokers. Store credit, also known as merchant or service credit, was extended by doctors, funeral parlors, grocers, dry-goods merchants, and others. Unexpected expenses, unexpected declines in income, a seasonal pattern to income, or a lack of currency in the community led individuals to use store credit. There was usually no collateral; only the family's promise to repay typically secured the credit.

Pawnbrokers, known colloquially as "loan sharks," extended money loans particularly to working-class families. This "small lending" was also extended by small loan institutes, usually known as industrial banks or industrial societies. Small loans were often secured by a pledge of household goods or personal property. Some working-class families, for instance, would regularly "pawn" the husband's good Sunday suit on Monday, only to redeem it after Saturday's payday. The loans were typically at very high interest rates for a short term, as much as 200 to 300 percent annually in Northeast and Midwest cities, and as much as 1,700 percent in Southern cities. The collateral would be forfeited if the repayment terms were not met. Pawnbrokers continue to do a great deal of business in twenty-first-century America, located primarily in low-income areas or near gaming centers, and often advertising themselves as "jewelry" stores.

Individuals who sought credit from pawnbrokers at the beginning of the twentieth century were typically perceived as being "down on their luck." The high interest rates they faced led reformers of the Progressive Era to advocate for regulation of "small lending." With the aid and sponsorship of the Russell Sage Foundation, reformers crafted a Uniform Small Loan Law in 1916, which was subsequently used as the basis of many states' legislation. By 1931, twenty-two states had enacted small loan acts conforming to the Uniform Small Loan Law. The legislation set maximum interest rates (usually 3 percent per month) and required that all charges be considered "interest."

Installment Credit

Installment credit is extended for the purchase of a specific product, repaid in regular monthly payments, and governed by a legally enforceable signed contract between buyer (debtor) and seller (creditor) that grants possession but not ownership of the good to the buyer. In the mid-1800s, installment credit was available primarily for furniture and for consumer goods that could be used to generate family income, such as pianos and sewing machines. Furniture credit was extended By the retailer. Other credit was offered By the manufacturer: Singer Sewing Machines began extending installment credit in 1856; piano manufacturers followed suit in the late 1800s.

During the 1920s, installment credit use exploded. Both greater supply and greater demand fueled the rapid increase. Automobile manufacturers used installment credit to sell more automobiles. Some manufacturers established legally separate corporations whose function was to finance dealer wholesale inventory and retail installment contracts. Prominent auto manufacturer John Willys founded Guaranty Securities Corporation in 1915; General Motors Acceptance Corporation was established in 1919; Ford Motor Company established Universal Credit Corporation in 1928. Other sales finance companies were independently established but subsequently signed contracts with auto manufacturers to be the exclusive source of retail installment credit for the manufacturer's franchised dealers: Commercial Credit Corporation was established in 1912 in Baltimore and in 1920 entered into a contractual relationship with Chrysler Corporation.

Demand for installment credit increased in the 1920s in part because the way in which the public viewed installment credit underwent an almost complete reversal during the 1920s. Before World War I, families that used installment credit did so with a bit of shame and secrecy. But By 1929, families that used installment credit were viewed as good financial managers, recognizing that they could "buy now and pay later" at what they believed were low monthly costs.

Installment contracts were not considered "loans" under the law; they were contractual agreements to pay for a good over time. The distinction matters because loans were subject to usury laws that set maximum interest rates, but contractual agreements to pay over time were not subject to such laws. The installment contract specified a down payment, a term, and the amount of the regular, usually monthly, payments. In the interwar period, the monthly payments were typically computed by taking the amount financed, multiplying it by an interest rate, adding in various fees and charges, and then spreading the total amount evenly over the term of the contract. The effective interest rate on the installment contract was therefore much greater than the stated interest rate on the contract. The fees and charges were hidden interest costs and the contract interest rate was assessed on the total amount financed at the beginning of the contract, but the amount financed was repaid over time. The contract interest rates ranged from 6 to 11 percent; the effective interest rates reached almost 100 percent.

Beginning in the 1920s, most installment contracts were purchased by sales finance companies. The buyer provided the down payment and signed the contract in the presence of the retailer. The retailer then sold the installment contract to a sales finance company, which had often extended a wholesale inventory loan to the retailer. The sales finance company received its operating funds by bundling together several hundred installment sales contracts and selling shares in the securitized bundle. The buyer typically then made payments directly to the sales finance company. The installment contract transferred possession but not ownership of the good to the buyer. Missed payments or other breach of contract resulted in swift repossession. Down payments were large—one-third down was not unusual for car installment sales—and terms were typically twelve months or less. Repos-session early in the installment term therefore resulted in a financial gain for the finance company.

Society's attitude toward installment buying switched from scolding to applauding in the 1920s, but bankers' attitudes did not change. Bankers retained their conservative, if circular, views: families that bought goods "on time" were bad credit risks; good credit risks would be able to manage their family finances so that they did not need credit. Finance companies had the last laugh, however. When the Great Depression hit in the 1930s, consumer credit was the only financial asset that showed a positive rate of return during the episode. Because of the threat of swift repossession, American families made good on their installment contracts despite the wage cuts and layoffs that permeated the depression economy.

Mortgage Lending

Home mortgage loans enable individuals to buy a house. Legal distinctions again matter. A mortgage is a loan; an installment contract is not. Under a mortgage, both possession and ownership of the house transfer to the buyer; with an installment contract, only possession transfers to the buyer. If a borrower defaults on or otherwise breaches a mortgage contract, the lender can place a lien on the house. This may necessitate sale of the house, but the lender does not take possession or ownership. Mortgage loans are subject to usury laws that set maximum interest rates; installment contracts are not.

Until the 1930s, many home mortgages were three-to five-year contracts. Monthly or quarterly payments often covered only accumulated interest and included little or no principal repayments. At the end of the mortgage, a "balloon" payment equal to all or most of the principal was due. Homeowners typically refinanced the mortgage, sometimes paying off some of the principal due but just as often refinancing the entire balloon. This arrangement implies that homeowners gained little equity in their homes as a result of their payments; equity was acquired only as housing prices rose.

The absence of principal payments became a crisis in the 1930s. Housing construction flourished in the 1920s following two decades of rapid population growth through immigration. But the post–World War I immigration restrictions of 1921 and 1924 had slowed the growth of housing demand just as housing supply was growing rapidly, and the combination of these two factors lowered housing prices. When balloon payments now became due, the new, lower price of the house could be insufficient to justify refinancing the balloon payment. Home mortgage foreclosures soared in the 1930s.

The New Deal reforms of President Franklin D. Roosevelt's administration sought to correct this feature of home mortgages. The Home Owners Loan Corporation was created by Congress in 1933 to refinance home mortgages. Principal payments were required to be fully amortized, spread out over the life of the loan.

Credit Cards

Credit cards began in the 1920s as charge cards offered to loyal customers of department stores, to identify the customers to retail clerks. Gas companies, in an effort to gain customers in the 1920s new environment of automobiling, distributed hundreds of thousands of unsolicited courtesy cards. These cards, by and large, did not feature credit but were simply a means of creating customer loyalty.

Diners Club was established in New York City in 1950 by theater producer Alfred Bloomingdale, his friend and head of Hamilton Credit Corporation, Frank McNamara, and McNamara's attorney, Ralph Snyder. Diners Club was a universal travel and entertainment (T&E) card: it could be used at many different businesses. Competitors Carte Blanche and American Express were introduced in 1958.

Revolving credit is the key feature of credit cards. Cardholders can charge items, pay off only part of the balance, but still charge more. William Gorman introduced revolving credit to department store cards in the 1940s, first at the L. Bamberger & Company department store in Newark, New Jersey, and in 1947 at Gimbel Bros. of New York.

Bank universal cards were established in the 1950s. Bank of America, of San Francisco, introduced Bank-Americard in 1959 and took it national in 1966. The Interbank Card Association, later the provider of Master Charge, was formed in response in the late 1960s. Bank Americard changed its name to Visa in 1976; Master Charge became Master Card in 1980.

Debit cards look the same as credit cards, but they do not extend credit. When a buyer uses a debit card, the amount charged is deducted directly and in full from the buyer's associated checking or savings account.

Bibliography

Baskin, Jonathan Barron, and Paul J. Miranti Jr. A History of Corporate Finance. Cambridge, U.K.: Cambridge University Press, 1997. An excellent recent history of corporate finance.

Board of Governors of the Federal Reserve System. Consumer Installment Credit. Washington, D.C.: Board of Governors, 1957. Three-volume report of government study of consumer credit with extensive bibliographic footnotes.

Calder, Lendol. Financing the American Dream: A Cultural History of Consumer Credit. Princeton, N.J.: Princeton University Press, 1999. Argues that the rise of consumer credit in America created worker discipline.

Lamoreaux, Naomi R. Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England. New York: Cambridge University Press, 1994. Important contribution to the history of antebellum banking and finance.

Mandell, Lewis. The Credit Card Industry: A History. Boston: Twayne Publishers, 1990. A thorough history of the credit card industry in the United States, but the absence of any footnotes or bibliography limits its usefulness.

Olney, Martha L. Buy Now, Pay Later: Advertising, Credit, and Consumer Durables in the 1920s. Chapel Hill: University of North Carolina Press, 1991. Chapter 4 contains history of consumer credit.

Phelps, Clyde William. The Role of the Sales Finance Companies in the American Economy. Baltimore: Commercial Credit Company, 1952. Published by a sales finance company, contains thorough history of the sales finance industry in the United States.

Robinson, Louis N., and Rolf Nugent. Regulation of the Small Loan Business. New York: Russell Sage Foundation, 1935. A perspective on small lending from the architects of United States small lending regulation.

Seligman, Edwin R. A. The Economics of Installment Selling: A Study in Consumers' Credit, with Special Reference to the Automobile. New York: Harper and Brothers, 1927. An epic study of installment credit, solicited by General Motors but widely regarded as objective and thorough.

To convey the general attitude of society toward consumer credit, Clyde Phelps wove together several quotes from articles published in popular and professional journals between 1926 and 1928.

The use of credit, and particularly the installment type, by consumers was characterized as "an economic sin," as "enervating to character because it leads straight to serfdom," as setting "utterly false standards of living," causing judgment to become "hopelessly distorted," and tending to "break down credit morale." It was attacked as "marking the breakdown of traditional habits of thrift," as tending to "weaken the moral fiber of the Nation," and as dangerous to the economy of the United States. It was accused of "breaking down character and resistance to temptations, to extravagance, and to living beyond one's means, breeding dishonesty," causing "many young people to get their first experience of being deadbeats through yielding to temptations that are placed before them," and "creating a new type of criminal or causing professional deadbeats to shift to this new and highly lucrative opportunity."

SOURCE: Clyde William Phelps, The Role of the Sales Finance Companies in the American Economy. Baltimore: Commercial Credit Company, 1952, pp. 39–40.

—Martha L. Olney

A term used in accounting to describe either an entry on the righthand side of an account or the process of making such an entry. A credit records the increases in liabilities, owners' equity, and revenues as well as the decreases in assets and expenses.

A sum in taxation that is subtracted from the computed tax, as opposed to a deduction that is ordinarily subtracted from gross income to determine adjusted gross income or taxable income. Claim for a particular sum of money.

The ability of an individual or a company to borrow money or procure goods on time, as a result of a positive opinion by the particular lender concerning such borrower's solvency and reliability. The right granted by a creditor to a debtor to delay satisfaction of a debt, or to incur a debt and defer the payment thereof.

Consumer credit consists of short-term loans made to people so that they can purchase consumer goods and services for personal or household purposes.

The term credit has various applications to transactions that involve borrowing. Credit can be used in reference to the ability to postpone payment, as in the case of an individual who has credit with a local store that allows purchase of items on a weekly basis and settlement of account due once a month. An individual might also be extended a credit line, the maximum amount of money that a lender will put at a borrower's disposal. In such case, an individual enters into an agreement for the taking out of a series of loans. Since there is a fixed limitation on the amount to be borrowed, payments must be made to reduce the debt incurred when the maximum is reached.

A letter of credit, sometimes called a creditor's bill, is a written instrument from a bank or merchant in one location requesting that anyone, or some specifically named individual, advance money or items on credit to the individual holding, or named in, the letter. Repayment of the debt is guaranteed by the bank or merchant issuing the letter. Letters of credit are popular in international commercial transactions because they enable parties to transact business without the need to exchange large amounts of cash. This type of instrument was also popular prior to the common usage of credit cards and travelers' checks.

Personal credit is granted based upon an individual's character, reputation, and business standing regarding his or her financial reliability.

Development of the Law of Credit

Traditionally, the law has sought to protect borrowers since they are easily exploitable by lenders. Often the two parties do not have equal bargaining opportunities to negotiate all the terms of the agreement, and, therefore, the stronger is able to take advantage of the more vulnerable. The established legal viewpoint is that a lender can properly charge a fee for use of the funds he or she lends, but the rate of interest should be neither unfair nor unconscionable.

Usury traditionally meant charging interest or a fee in exchange for a loan, but it has come to mean charging an illegal rate of interest. Certain credit transactions, such as the loan of money pursuant to a mortgage, are exempt from the provisions of usury statutes.

Amortization

Amortization — a system that allows a borrower to discharge a debt in regular, equal installments — was developed in the nineteenth century by savings and loan associations. To amortize a loan, the lender must calculate the total interest due over the term of repayment, add that figure to the total sum borrowed, and divide the total by the number of payments to determine the size of regular, periodically scheduled payments to be made by a debtor.

Morris Plans

The establishment of Morris plan companies, still found in some states, was a significant development in the consumer credit business. These industrial banks accept deposits from the general public and issue investment certificates in the amount of each deposit. The certificates entitle the holder to obtain interest on a deposit at regularly scheduled intervals. The bank utilizes the funds primarily to make small loans to wage earners who are steadily employed. It is necessary for borrowers to secure two other salaried individuals to endorse the agreement. The loan is repaid in installments during the course of a one-year period.

State Consumer Laws

Originally the fact that consumer loans were difficult to obtain created loan sharking — the practice of lending money at usurious interest rates — coupled with the threat or use of extortionate methods of enforcing repayment. The Russell Sage Foundation analyzed the loan shark problem in 1916 and suggested that credit should be made available to consumers. It proposed a Uniform Small Loan Law for enactment by the states that defined small loans as those under $300. A maximum interest rate of three and one-half percent monthly on small loans was suggested. The interest rate was stated as a per-month charge in order to encourage legislators to adopt the act and to prevent consumers from going to loan sharks who make a practice of concealing their true rates of interest.

The Uniform Small Loan Law was subsequently revised but was important since it made way for legal lending to consumers. It was created as an exception to state usury laws and furnished the pattern for the subsequent creation of consumer credit legislation.

Legal Rate of Interest

Interest can be computed in a number of ways, and creditors generally attempt to use the most profitable way that is within legal limits. In figuring the legal rate of interest, it is essential to determine which expenses are a part of the finance or interest charges. Not customarily considered components of finance charges are fees for filing or recording a document, for payment of an individual who does an appraisal, and for the expense of preparing documents; closing costs; and prepayment penalties.

The ability to obtain goods, money, or services in return for a promise to pay at some later date.

Court Referral For Evaluation And Drug Intervention Treatment

Quotes:

"Creditor. One of a tribe of savages dwelling beyond the Financial Straits and dreaded for their desolating incursions." - Ambrose Bierce

"O Gold! I still prefer thee unto paper, which makes bank credit like a bark of vapor." - Lord Byron

"Nothing so cements and holds together all the parts of a society as faith or credit, which can never be kept up unless men are under some force or necessity of honestly paying what they owe to one another." - Marcus T. Cicero

"A person who can't pay gets another person who can't pay to guarantee that he can pay. Like a person with two wooden legs getting another person with two wooden legs to guarantee that he has got two natural legs. It don't make either of them able to do a walking-match." - Charles Dickens

"Remember that credit is money." - Benjamin Franklin

"Blest paper-credit! last and best supply! That lends corruption lighter wings to fly!" - Alexander Pope

See more famous quotes about Credit

Credit may refer to:

• Debits and credits, a type of bookkeeping entry
• Credit (creative arts), acknowledging the ideas or other work of writers and contributors
• Credit (education), a system of measuring academic coursework
• Credit (finance), the granting of a loan and the creation of debt
  • Credit rating, assessment of credit worthiness
  • Credit score, a representation of credit worthiness
  • Credit history, a record of an individual's or company's past borrowing and repaying
    • Adverse credit history
  • Credit card, a plastic card for access to a credit account
• Motion picture credits, a list of the cast and crew involved in the production of a movie or television program
  • Opening credits or Closing credits
• Credit (creative arts),
• Credits (science fiction), a unit of currency used in science fiction
• Token coin, coin-like objects used instead of coins
• Credit River (Ontario), a river in southwestern Ontario, Canada
• Credit River (Minnesota), a river in Minnesota, United States

This disambiguation page lists articles associated with the same title. If an internal link led you here, you may wish to change the link to point directly to the intended article.

This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)

Dansk (Danish)
n. - stolthed, anerkendelse, anseelse, tro, troværdighed, økonomisk status, kredit, diplom
v. tr. - tro på, kreditere for

idioms:

• credit card    kreditkort
• credit note    kreditnota
• credit rating    kreditvurdering
• credit sale    kontosalg
• credit squeeze    kreditstramning
• credit titles    rulletekst
• credit to    kreditere for, tilskrive
• credit transfer    pengeoverførsel
• credit with    kreditere for
• do credit    gøre ære
• give credit to    tro på
• on the credit side    på kreditsiden
• to one's credit    til ros for, til forsvar for

Nederlands (Dutch)
krediet, studiepunt, credit, tegoed, goede reputatie, financiële geloofwaardigheid, geloof, één cijfer hoger dan voldoende, (mv) aftiteling, geloven, toeschrijven, studiepunten toekennen, op een rekening storten, accreditief, bronvermelding sieren

Français (French)
n. - (Comm, Fin) crédit, mérite, crédit, (Fin) crédit/être créditeur, croyance, créance, (US, Univ) unité de valeur
v. tr. - créditer, attribuer (qch) à qn, (Fin) créditer de, croire, ajouter foi à

idioms:

• credit card    (Comm, Fin) carte de crédit
• credit note    (Comm) avoir, note de crédit
• credit rating    (Fin) réputation de solvabilité
• credit sale    (Comm) vente à crédit
• credit squeeze    (Écon) restrictions des crédits
• credit titles    (Cin) générique
• credit to    attribuer à
• credit transfer    (Fin) virement
• credit with    attribuer à, croire ou supposer qn (être)
• do credit to someone    être tout à l'honneur de qn
• do someone credit    être tout à l'honneur de qn
• give credit to    reconnaître l'apport de qn, (fig) faire crédit à
• give someone credit for    (fig) faire crédit à qn
• in credit    (être) créditeur
• on credit    à crédit
• on the credit side    à l'actif
• to one's credit    à son honneur

Deutsch (German)
n. - Auszeichnung, Anerkennung, Kredit, Schein, Akkreditiv, Guthaben, Liste der Mitarbeiter und sonstigen Beteiligten
v. - glauben

idioms:

• credit card    Kreditkarte
• credit note    Gutschein
• credit rating    Kreditwürdigkeit
• credit sale    Kreditkauf
• credit squeeze    Krediteinschränkung
• credit titles    Nachspann, Vorspann
• credit to    gutschreiben
• credit transfer    Banküberweisung
• credit with    jmdm. etwas zuschreiben
• do credit to someone    jmdm./einer Sache Ehre machen
• do someone credit    zur Ehre gereichen
• give credit to    Glauben schenken
• give someone credit for    jmdm. für etw. Anerkennung zollen (geh.)
• in credit    im Haben sein, mit seinem Konto im Haben sein
• on credit    auf Kredit
• on the credit side    für etwas sprechen
• to one's credit    jmdm. Ehre machen

Ελληνική (Greek)
n. - πίστη, εμπιστοσύνη, καταξίωση, αναγνώριση, εκτίμηση (της κοινωνίας), υπόληψη, αποδοχή, έγκριση, αναγνώριση (προσφοράς κ.λπ.), αναγνώριση (της βαθμολογίας) μαθημάτων σπουδαστή, (οικον.) (τραπεζική) πίστωση, πιστωτικό υπόλοιπο (λογαριασμού), προθεσμία εξόφλησης, (πληθ.) μνεία συνεργασίας ή βιβλιογραφίας, τίτλοι έναρξης ή τέλους κινηματογραφικής ή τηλεοπτικής ταινίας, ζενερίκ
v. - πιστεύω, δίνω πίστη (σε), εγγράφω στο ενεργητικό (του), (οικον.) πιστώνω, χορηγώ πίστωση

idioms:

• credit card    (οικον.) πιστωτική κάρτα
• credit note    (οικον.) πιστωτικό σημείωμα
• credit rating    (οικον.) αξιολόγηση φερεγγυότητας πιστολήπτη, βαθμός πιστοληπτικής ικανότητας
• credit sale    (οικον.) πώληση επί πιστώσει
• credit squeeze    πιστωτική συμπίεση, περιορισμός πιστώσεων που επιβάλλουν οι νομισματικές αρχές
• credit titles    μνεία συνεργατών (έργου, κινηματογραφικού φιλμ κ.λπ.) (κν. ζενερίκ)
• credit to    πιστώνω σε, γράφω στο ενεργητικό
• credit transfer    (οικον.) μεταφορά πίστωσης
• credit with    πιστώνω με, γράφω στο ενεργητικό, επαινώ για, αποδίδω σε
• do credit    περιποιώ τιμή σε, είμαι προς τιμήν (κάποιου)
• give credit to    απονέμω εύσημα σε, εξαίρω, δίνω πίστη σε
• on the credit side    στο ενεργητικό, στη στήλη της πίστωσης
• to one's credit    προς τιμήν του

Italiano (Italian)
credito, lettera di credito, saldo di credito attivo, indicazione delle fonti

idioms:

• be to someone's credit    a credito di qualcuno
• credit card    carta di credito
• credit note    buono
• credit rating    solvibilità
• credit sale    vendita a credito
• credit squeeze    restrizione creditizia
• credit titles    titoli
• credit to    attribuire a
• credit transfer    trasferimento di credito
• credit with    ascrivere a
• do credit    onorare
• give credit to    dar credito a
• lend credit to    prestar credito a
• on the credit side    sull'attivo

Português (Portuguese)
n. - crédito (m), influência (f), mérito (m)
v. - acreditar em, dar crédito

idioms:

• credit card    cartão (m) de crédito
• credit note    nota (f) promissória
• credit rating    taxa (f) de crédito
• credit sale    venda (f) a crédito
• credit squeeze    aumento (m) de juros
• credit titles    créditos (m pl) (cinema)
• credit to    insinuar-se
• credit transfer    transferência (f) de crédito
• credit with    reconhecer o mérito
• do credit    dar crédito, reconhecer o talento
• give credit to    acreditar em
• lend credit to    aumentar a confiança em
• on the credit side    lado (m) direito onde o contador registra os créditos
• to one's credit    fazer com que alguém mereça elogios ou admiração

Русский (Russian)
кредит, сальдо, титры

idioms:

• be to someone's credit    отдавать должное
• credit card    кредитная карточка
• credit note    кредитовое авизо в пользу кого-то
• credit rating    кредитоспособность
• credit sale    продажа в кредит
• credit squeeze    ограничения на кредит
• credit titles    титры
• credit to    доверять
• credit transfer    перевод кредита
• credit with    приписывать что-либо
• do credit    отдавать должное
• give credit to    отдавать должное
• lend credit to    делать правдоподобным
• on the credit side    в защиту
• to one's credit    отдавать должное

Español (Spanish)
n. - crédito, carta de crédito, haber, saldo acreedor, atribución, reconocimiento
v. tr. - poner al haber, acreditar, reconocer

idioms:

• credit card    tarjeta de crédito
• credit note    nota de crédito, vale
• credit rating    solvencia, clase y cantidad de crédito que puede otorgarse a una persona o empresa
• credit sale    venta a crédito
• credit squeeze    congelación o restricción del crédito
• credit titles    créditos, títulos de reconocimiento a participantes en la producción de una película
• credit to    atribuir a, abonar, ingresar en
• credit transfer    transferencia de crédito
• credit with    acreditar a, atribuir
• do credit to someone    honrar, enorgullecer, hablar bien, acreditar, abonar una cantidad a alguien
• do someone credit    honrar, enorgullecer, hablar bien, alabar
• give credit to    atribuir o reconocer el mérito a alguien
• give someone credit for    dar crédito a alguien por
• i