On Credit

In finance, the term on credit is used in reference to goods and services which are purchased without the immediate settlement of payment.

Merchants provide goods or services to buyers on credit because they believe that buyers will pay for those goods and services later. Goods and services provided on credit must – in most cases – be paid for within a pre-agreed time frame.

Many Swiss merchants provide goods and services on credit, allowing customers to pay via wire transfer or deposit slip after receiving the goods or services. Some retailers issue store cards which can be used to purchase goods on credit.

Buying on credit differs from getting a loan in that you do not borrow assets which must be returned. Instead, you receive goods and services which you must pay for in cash. Normally, you do not pay interest on the value of goods or services supplied on credit.

In the case of revolving credit, payment is not required. Instead, interest is charged on the debt. Credit cards and store cards are two of the most common examples of revolving credit instruments.

While a credit card lets you make purchases and pay for them a later date, purchases are in fact paid for immediately by your credit card issuer. The issuer gives you a loan every time you use your credit card to pay. You the repay the combined loans on the monthly payment-due date. Most credit cards let you carry your debt into the next month as long as you make a minimum payment, but you pay interest on this debt.

More on this topic:
Swiss credit card comparison

Special offers for Moneyland users

Moneyland Special Offers

Swiss Bank

Bank WIR Bankpaket Top

  • Free account & card

  • No exchange fees for foreign payments (interbank exchange rates)

  • 24 ATM withdrawals worldwide per year free of charge

Swiss Broker

Saxo Bank Special Offer

  • Special offer: Reimbursement of brokerage fees up to CHF 200 for 90 days

  • Licensed Swiss bank (FINMA)

  • Free expert research and trading signals

Swiss Trading Platform

Cornèrtrader Special Offer

  • Special offer: particularly favorable conditions for Moneyland users

  • No custody account fees for shares

  • Swiss online bank with FINMA license

Swiss digital bank

Alpian

  • CHF 100 welcome bonus

  • Favorable foreign exchange rates

  • Multi-currency account with Visa card (CHF, EUR, USD, GBP) 

Funds

Allianz Fund Investments

  • Special offer with CHF 200 welcome bonus

  • No prior knowledge necessary: Advice from experts

  • One of the 10 largest asset managers worldwide

Special offers for Moneyland users

Moneyland Special Offers

Swiss Bank

Bank WIR Bankpaket Top

  • Free account & card

  • No exchange fees for foreign payments (interbank exchange rates)

  • 24 ATM withdrawals worldwide per year free of charge

Swiss Broker

Saxo Bank Special Offer

  • Special offer: Reimbursement of brokerage fees up to CHF 200 for 90 days

  • Licensed Swiss bank (FINMA)

  • Free expert research and trading signals

Swiss Trading Platform

Cornèrtrader Special Offer

  • Special offer: particularly favorable conditions for Moneyland users

  • No custody account fees for shares

  • Swiss online bank with FINMA license

Swiss digital bank

Alpian

  • CHF 100 welcome bonus

  • Favorable foreign exchange rates

  • Multi-currency account with Visa card (CHF, EUR, USD, GBP) 

Funds

Allianz Fund Investments

  • Special offer with CHF 200 welcome bonus

  • No prior knowledge necessary: Advice from experts

  • One of the 10 largest asset managers worldwide

Deal of the Day
×
Swiss Bank

Bank WIR Bankpaket Top

Free account & card

Editor Daniel Dreier
Daniel Dreier is editor and personal finance expert at moneyland.ch.