DEFINITION of 'Creditor Nation'

A nation with a cumulative balance of payment surplus. A creditor nation has positive net investment after recording all of the financial transactions completed between it and the rest of the world.

BREAKING DOWN 'Creditor Nation'

Creditor nations have invested more resources in other countries than the rest of the world has invested in them. To determine if a country is a creditor nation, one must account for the the nation's overall debt balance when calculating the balance of payments.

Creditor nations can sometimes lose their status and become debtor nations. This happened to the United States in 1988 when its balance of payments turned negative.

RELATED TERMS
  1. Debtor Nation

    A nation with a cumulative balance of payments deficit. A debtor ...
  2. Current Account Surplus

    A positive difference between a nation’s savings and investment. ...
  3. National Currency

    The currency or legal tender issued by a nation's central bank ...
  4. Creditor

    An entity (person or institution) that extends credit by giving ...
  5. Balance Of Payments (BOP)

    A record of all transactions made between one particular country ...
  6. Creditors' Committee

    A group of people who represent a company's creditors in a bankruptcy ...
Related Articles
  1. Insights

    The Balance Of Payments

    The "Balance of Payments" is a record of all payments or monetary transactions between a particular country and other nations during a specific time period. It provides a useful glimpse into ...
  2. Personal Finance

    What Does a Creditor Do?

    A creditor is a person or entity that loans money or provides goods or services to another entity with the expectation of being paid back in the future.
  3. Investing

    Understanding Free Trade

    Free trade exists when nations can swap goods and services without the constraints of tariffs, duties or quotas.
  4. Investing

    What does Current Account mean?

    The current account reflects the difference between a country’s savings and investments.
  5. Insights

    What The National Debt Means To You

    The U.S. deficit seems to grow every year. But how does it actually affect you?
  6. Investing

    Understanding Imports

    An import is a good or service that’s brought into one country from another.
  7. Insights

    The Top Reasons Behind The U.S. National Debt

    National debt, as with a business, is basically the difference between receipts and expenses--but in the U.S., the latter has far outpaced the former. Why?
  8. Investing

    What's the Balance of Trade?

    The balance of trade is the difference between the value of all the goods and services a country exports and the goods and services it imports.
  9. Investing

    Is Smaller Better When Investing Overseas?

    When it comes to global stocks think small (and not in a market-cap sense). Smaller developed nations have outperformed larger rivals by a big margin.
  10. Investing

    How Does National Income Accounting Work?

    National income accounting is an economic term describing the system used by a country to gather data and determine aggregate economic activity.
RELATED FAQS
  1. What's the difference between the current account and the balance of payments?

    Learn about the differences between balance of payment and current account; discover different uses of each term and how ... Read Answer >>
  2. In a corporate liquidation, why are unpaid taxes and wages paid before general creditors ...

    The Bankruptcy Code, section 507, states that when a corporation is liquidated, creditors are paid in a particular order: ... Read Answer >>
  3. Do creditors have the same rights in all 50 US states?

    Learn more about the rights of creditors to pursue their debts; how they may vary from state to state and how they are regulated ... Read Answer >>
  4. What's does the current account have to do with the trade balance?

    Learn how a nation's trade balance is factored into its current account, and the differences between these two common terms. Read Answer >>
  5. What are the full rights of creditors in cases of bankruptcy?

    Learn more about corporate bankruptcy and the rights of creditors. Find out how creditors are repaid in the event of bankruptcy ... Read Answer >>
  6. Which is more important to a nation's economy, the balance of trade or the balance ...

    Learn how to differentiate between the balance of trade and balance of payments for international trade and why the balance ... Read Answer >>
Hot Definitions
  1. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  2. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  3. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  4. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  5. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  6. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
Trading Center