A credit transaction occurs when a buyer purchases goods or services using borrowed funds, rather than paying with cash. This often involves a credit card or a loan, allowing the buyer to pay the seller immediately while agreeing to repay the borrowed amount later, usually with interest. In a credit transaction, the seller receives payment upfront, reducing their risk. The buyer benefits by obtaining the item without immediate payment, but they must manage their repayment schedule to avoid debt accumulation. Common examples include using a credit card for shopping or taking out a personal loan for larger purchases.