8.01-8.05

Credit cards

(Visa, MasterCard, etc.) are perhaps the most used form of open-end credit. Credit cards can be used in a vast number of locations, including most retail stores, online sites, and most businesses.

Smart cards

These cards have a computer chip embedded in the card that can carry a great deal of information, such as driver's license information, medical history, and health care information.

convenience users

Those who pay off their balances in full each month and avoid the finance and interest charges are known as

Closed-end credit

is a one-time loan that you pay back over time in payments of equal amounts.

Open-end credit

is loans made on a revolving basis with the repayment period not set. Open-end credit is also known as revolving credit.

retail cards

which are similar to credit cards, but which can only be used at the business offering the retail card.

bank line of credit.

A bank line of credit generally has installments that you pay over time, and there may be finance charges based on the amount of credit used rather than having interest charged on the amount of available credit.

Five C's of Credit

Character, Capacity, Capital, Collateral, Conditions

secured credit card

With secured cards, you submit money to the financial institution and then you are able to use your credit card up to the amount of money that you deposited.

Stored value cards

are also known as gift cards and prepaid cards. These cards have a prepaid amount of money on the card that is available for use.

Debit cards

are used to electronically subtract money from a savings or checking account to pay for a purchase.