What is the role of credit in consumer behavior?

Credit plays a significant role in consumer behavior by enabling individuals to make purchases and investments without having to wait until they have saved enough money. With credit, consumers can access loans, credit cards, and other forms of debt to buy goods and services, often paying for them over time. The availability of credit influences consumers’ spending habits and can drive demand for products. However, excessive reliance on credit can lead to debt accumulation and financial instability, which is why creditworthiness and responsible borrowing are important for maintaining long-term financial health. Credit can also affect consumers’ decisions on major purchases like homes, cars, and education.