Credit is deferred payment; there is a period of trust, and it may be long or short. The longer the period the more the contingencies against which the creditor must provide. "Commercial credits" have come to differentiate themselves from "financial credits" on the basis of the term; the former are for 10, 20, 30, 60, 90, and 120 days, and are evidenced by promissory notes, checks, drafts, bills of exchange, acceptances, and so forth; the latter are for periods of 1, 2, 3, 5, 10, 20, and 40 years, and are evidenced by various forms of notes, bonds, and certificates. Commercial or mercantile credits are used to conduct the daily operations of business life. It is always assumed that the money or goods are to be used in such ways that the debtor will be in a position to realize upon his transaction within the period of the credit and so will be able to pay upon maturity.

Financial credits, on the other hand, being for long terms of years, are issued with the idea that the money or wealth which the creditor contributes to the debtor is for quite permanent use. If the creditor wishes to regain his funds before maturity he does so by selling the credit instrument to another who may wish to become creditor to the debtor; and it is commonly understood that the debtor will never make repayment in his own money or goods, but that the present credit will be met at maturity by refunding, that is, borrowing further funds either from the same creditor or others. There are, however, various practices by which commercial credits function in real fact as long-term credits.