Bank Credit


DEFINITION of 'Bank Credit'

The amount of credit available to a company or individual from the banking system. It is the aggregate of the amount of funds financial institutions are willing to provide to an individual or organization.


A company or individual's bank credit depends on both the borrower's capacity to repay and the overall amount of credit available in the banking system. Bank credit for individuals expanded enormously over the past 50 years, as consumers grew accustomed to having several credit cards. Some observers were predicting that the financial crisis in 2008 could mean a return to those earlier years, when credit, although relatively cheap, was difficult to obtain, especially for those with poor credit histories.

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