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Credit Cards and Consumer Loans Chapter 7. Types of Consumer Credit Installment (closed-end) credit is the type in which the borrower must repay the amount.

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Presentation on theme: "Credit Cards and Consumer Loans Chapter 7. Types of Consumer Credit Installment (closed-end) credit is the type in which the borrower must repay the amount."— Presentation transcript:

1 Credit Cards and Consumer Loans Chapter 7

2 Types of Consumer Credit Installment (closed-end) credit is the type in which the borrower must repay the amount owed plus interest. Noninstallment (open-ended or revolving) credit is a single payment credit. The latter extends the credit in advance of any transaction so no reapplication is needed.

3 Credit Card Accounts Credit cards allow the holder to pay the balance either in full or carry over a balance. If the balance is carried over, a minimum payment must be made each month to cover interest and principal.

4 Types of Credit Card Accounts Bank credit cards. Retail credit cards. Travel and entertainment cards.

5 Common Aspects of Credit Cards Teaser rates. Default rates. Variable interest rates. Preapproved credit card offers. Annual and transaction fees. Liability for lost or stolen cards.

6 Common Aspects of Credit Cards (ctd) Credit card insurance Late-payment and over-the-limit fees.


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