Consumer credit is considered an important part of modern society. Based on the lessons, list and describe the two types of consumer credit. Include how they are similar, how they are different, and provide at least one example of each type of consumer credit.

The two types of consumer credit

(1) Revolving credit

(2) installmental credit.

Revolving credit is a type of credit that allows you to continue to borrow and pay back and continue again.

Installmental credit is a credit with a fixed amount and the borrower is expected to make continuous installmental payments either monthly or weekly etc.

SIMILARITY: They both involves Borrowing of money to pay in a later date.

DIFFERENCE: Revolving credit is a continuous credit as it is seen with CREDIT CARDS while Instalment credit is not continuous as ONLY A FIXED SUM IS BORROWED AND PAID IN INSTALMENT.

Example of Revolving credit credit card issued by banks etc.

Examples of instalment credit is Mortgage loan,car loan etc

Explanation: Consumer credit is the process or procedures put in place to ensure that consumers can borrow money either from private or Government establishments. It is classified into Revolving credit and installmental credit.

They both involves the borrowing of certain amount to pay at another time.

Credit cards are an example of Revolving credit while Home loan,car loan etc are Installmental credit.

The two types of consumer credit are closed-end credit, and open-end credit.

They're alike because in both types of credit, loans are made. However, closed-end credit is a one-time loan that you pay back over time in payments of equal amounts and is typically used for a specific purchase, while open-end credit has loans continuously made with the repayment period not set and is typically used for multiple purchases.

An example of closed-end credit is installment sales credit, where you're given a loan in order to purchase an item, and then later agreeing to pay a set amount of money in installments until you pay off the loan and interest. An example of open-end credit is a credit card.

Explanation:

personal financial literacy flvs