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Simple English definitions for legal terms
charge account
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A quick definition of charge account:
A charge account is when you buy things and pay for them later. You can buy things and pay for them all at once or over a certain period of time. It's like borrowing money from the store or company you're buying from. You need to be trusted to pay back the money you owe. Sometimes, you can buy things on a charge account as long as you don't owe too much money already. This is called a revolving charge account.
A more thorough explanation:
A charge account is a credit arrangement between a customer and a seller. The customer can purchase goods and services and pay for them periodically or within a specified time. This means that the customer can buy things without having to pay for them right away.
- When you go to a department store and use a credit card to buy clothes, you are using a charge account. You will receive a bill at the end of the month for the amount you owe.
- If you have a charge account at a local hardware store, you can buy tools and supplies for your home improvement projects and pay for them later.
These examples illustrate how a charge account works. The customer can make purchases without having to pay for them immediately. Instead, they will receive a bill or statement at a later time, usually at the end of the month. This allows the customer to manage their finances and make purchases when they need to, without having to worry about having enough money on hand.