Types of Credit
By: Steve Moreno
What Is Credit?
What Are The Forms of Credit?
Secured: With this kind of credit, the creditor guarantees that it will be paid back by putting a lien on an asset you own. Car loans, mortgages, and home equity loans are common types of secured credit.
Unsecured: When your credit is unsecured, you simply give your word to the creditor that you will repay what you borrow. Credit card, medical, and utilities bills are all examples of unsecured credit.
Revolving: If your credit is revolving, the creditor has approved you for a set amount and you can access the credit whenever you want and as often as you want. In return, you must pay the creditor at least a minimum amount on your account’s outstanding balance each month. Credit cards and home equity lines of credit are examples of revolving credit.
Installment: With installment credit, you borrow a certain amount of money for a set period of time and you repay the money by making a series of fixed or installment payments. Examples of installment credit include mortgages, car loans, and student loans
Costs/Benefits of Credit?
- Convenience--Credit cards can save you time and trouble--no searching for an ATM or keeping cash on-hand.
- Record keeping--Credit card statements can help you track your expenses. Some cards even provide year-end summaries that really help out at tax time
- Instant cash--Cash advances are quick and convenient, putting cash in your hand when you need it.
- Build positive credit--Controlled use of a credit card can help you establish credit for the first time or rebuild credit if you've had problems in the past--as long as you stay within your means and pay your bills on time.
What Is A Credit Score?
What Is A Credit Card?
What are Credit Cards Used For?
What Are the Costs/Benefits Of Using A Credit Card?
Buying A Credit Card
- Annual Rate: 0% for first 12 months
- APR: 13.24%-24.24%
Cash Advances- 5% fee
Balance Transfer-3%Purchases on trips abroad-3% fee
Earn points on every purchase and use those points to redeem rewards such as gift cards, travel tickets, concert tickets, etc.
- Annual Rate: $0 for first 12 months
- APR: 13.24%-22.24%
- Fees: $35 late fee Balance transfer 3% fee Cash Advance 5%-10% fee Returned Check $35 fee
No foreign transaction fee
0% interest APR
Good grade rewardsbonus cash back categories