Credit terms definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Credit terms can be defined as: Description of the amounts and timing of payments that a buyer (debtor) agrees to make in the future. Credit term defines the terms of credit meaning that credit terms specify when payment is received for a sale made on account. Credit terms may be simple, just a due date, or credit terms can be more complex including things like discounts if paid within a lesser time frame then the standard credit terms. Credit terms can be writing if a format like 1/15, n/60, this credit term format meaning that there would be a 1% discount if paid within 15 days, normal terms 60 days. Credit terms can be very important to clarify payment expectations.