Types of Credit

Most people use two primary types of credit: credit cards and loans.

• Credit cards are a type of revolving credit. That means you can use your credit card over and over, as long as you spend less than the credit limit your lender sets and you pay your bills regularly. As you repay what you’ve borrowed, you can borrow that amount again.
• Loans are installment credit. You borrow a fixed amount and make regular repayments, usually once a month, until you’ve paid off the loan. If you need to borrow more, you try to arrange another loan.

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