Personal Finance 1st Edition by Jack R. Kapoor

Exercise 12

1   What are the two main types of consumer credit?

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2   What is a debit card?

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3  What is a home equity loan?

Action Application Research three credit card companies. List their fees and any advantages they offer. Record your findings.

Step 1 of 4

1) Consumer credit:

The two main types of consumer credit are:

Closed-end credit and

Open-end credit.

Closed-end credit

a) With closed-end credit, the borrower pays back one-time loans in a specified period of time and in payments of equal amounts.

b) It is used for a specific purpose and is for a specified amount.

Examples are- mortgage loans, automobile loans, and installment loans for purchasing furniture or appliances

c) It usually involves a written agreement for each credit purchase.