Card Options

Three basic types

Single-payment credit
Items and services are paid for in a single payment, within a given time period after the purchase. Interest is usually not charged. Examples include utility companies, medical services and some retail businesses.

Installment credit
Merchandise and services are paid in two or more regularly scheduled payments of a set amount. Interest is included. Examples include some retail businesses, such as car and appliance dealers, as well as commercial banks, consumer finance companies, savings and loans, and credit unions. Money may also be loaned for a special purpose, with the consumer agreeing to repay the debt in two or more regularly scheduled payments.

Revolving credit
Many items can be bought using this plan as long as the total amount does not go over the credit user's assigned dollar limit. Repayment is made at regular time intervals for any amount at or above the minimum required amount. Interest is charged on the remaining balance. Examples include retail stores credit cards and financial institutions that issue credit cards.