Consumer Credit

Consumer credit refers to borrowed funds provided to individuals for personal use — most commonly through credit cards, loans, or hire purchase agreements.

With a consumer credit card, purchases are made using the lender’s money, and the cardholder repays later, either in full or over time with interest. Because of the lending risk, interchange fees and regulatory requirements are typically higher than for debit cards.

Example:

A customer pays £200 for travel using a Mastercard Credit card. The card issuer covers the payment immediately, and the customer repays the balance on their monthly statement — potentially with interest if unpaid in full.

Used in:

Retail finance, card payments, lending products, and consumer protection frameworks (e.g. the UK Consumer Credit Act).