What is Credit? Credit is based on the Latin word creditum, meaning trust or faith -- an expression of trust in you and your promise to pay in the future for merchandise purchased or money borrowed. This expression of trust is not money and it is not free. You pay interest or finance charges for the privilege of using credit. Credit is critical to the national economy as well as your household economy. Credit has become an important part of all phases of today's life and its importance continues to grow. Working capital for businesses, automobiles, and home purchases would not be possible without credit. Credit has made outstanding contributions to the development of the U.S. economy and to the high standard of living enjoyed by many Americans.