Credit

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What is credit and what are the different forms?

Credit is money borrowed to receive goods when you need them. One of the different types of credit is a revolving credit line. You make different payments each month, depending on how much you use that particular line of credit. An installment account has a fixed payment due each month. The final type of credit is the open account. Open accounts each have a balance that is to be paid in full every month.

What are the costs and benefits associated with credit and how do you get credit?

Having a credit card and using it wisely (making payments on time and in full each month) will help you build a good credit score. A disadvantage would be credit card lenders charge you an enormous amount of interest on each balance that you don't pay off at the end of each month.

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