A credit transaction occurs when a buyer purchases goods or services and agrees to pay for them later, rather than paying upfront. This type of transaction often involves a financial institution, such as a bank or credit card company, which provides the buyer with the necessary funds to complete the purchase. The buyer then repays the lender over time, usually with interest. In a credit transaction, the seller typically receives payment immediately from the lender, while the buyer takes on a debt. Common examples include using a credit card to buy items or taking out a loan to finance a large purchase, like a car or home.