A broad term that refers to all types of lending facilities extended by a market participant to another over the course of a certain period of time, and according to pre-agreed contractual terms. Typically the party to which credit is extended agrees to repay with a certain form of consideration (interest) over time or at one point in time. In this sense, credit extended by a bank or banking institution is known as a bank credit. Credit takes many types including installment credit, open credit and revolving credit. Banks can extend secured credit or unsecured credit, depending on collateral requirements.

Generally speaking, credit is an agreement between a borrower and a lender, including a promise that the borrower will pay the amount of money back at a certain date in the future, usually with interest.

In a corresponding context, credit is the additional part of money supply in an economy that a bank can create by engaging in the business of deposit taking and lending. By virtue of its license, a bank can create money (money creation) simply by borrowing (taking deposits), maintaining a fraction of these deposits and lending most of the amounts to the market.