gWhat is the relationship between credit and debt?

Accounting Dec 17, 2020

Expert Solution

Credit and debt are closely linked. Credit is what you use when you buy something and cannot pay cash right then. This can be in the form of a loan or a credit card, for example. When you buy with a credit card you buy using credit because it does not come directly out of your account. Debt is what you now owe because you bought something on credit. Essentially, when you buy something on credit you are then in debt until you pay off what you owe.

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