What is the arrangement called that allows you to receive cash, goods, or services now and pay for them in the future?

The arrangement that allows you to receive cash, goods, or services now and pay for them in the future is called credit. Credit is essentially a trust arrangement where a lender provides resources with the expectation that the borrower will repay the loan amount, typically with interest, over a specified period. It enables individuals to make purchases and access funds they may not currently have, facilitating immediate consumption while spreading the cost over time.

This concept is fundamental in personal finance as it can help manage cash flow and finance larger purchases that might otherwise be unattainable. For instance, using a credit card allows a consumer to buy items now and pay for them later, typically within a billing cycle.

In contrast, a loan is a broader term that refers to any amount of money borrowed that typically must be repaid with interest. While loans are a form of credit, not all credit arrangements involve loans. A mortgage is a specific type of loan used to finance the purchase of real estate, and debt consolidation refers to combining multiple debts into a single debt to achieve more favorable repayment terms. These concepts, while related, do not encompass the general arrangement of receiving immediate benefit in exchange for future payment like credit does.