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When you buy something you probably pay for it straight away with notes or coins (cash). If you don't have enough cash for what you want, you may save up or borrow from a relative or friend.

Buying on credit is a way of borrowing money from a bank or finance company so that you can have what you want and pay for it later. Anyone who is over 18 years old can ask for credit.

Millions of people use credit to buy expensive things like cars or furniture, the sort of things that it could take years to save up for. Most home owners use credit to buy their house or flat. It is called a mortgage.

There are lots of different types of credit. One of the most popular is something called a credit card. This is a small piece of plastic which you can use to pay for goods. Instead of handing money over you give your credit card. You are allowed to spend up to a certain amount and you have to repay some of the money you owe to the bank each month.

The snag is that borrowing costs money and you will end up paying back more than you borrow. The word for this extra amount is interest.

Some people use credit too often and find that they just cannot afford to pay back all that they have borrowed. They end up in debt. Some lose their homes and many of their possessions.

If you want to find out more about credit and debt this section explains more and includes the 10 golden rules to help people if they have problems paying off credit or other debts.

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