Types of credit

Credit can be used to buy things over a short or long period of time, like furniture, houses, cars and even businesses. The type of credit you need depends on the amount you want to borrow.  Different types of credit available include:

 

  • Short–Term credit lets you borrow money that you need to repay in a few months. People usually use this type of credit to cover unexpected expenses.  Credit cards and personal loans are good examples of short-term credit.

 

  • Long–Term credit lets you borrow a bigger amount of money and pay it back it over a number of years. People use this type of credit to buy big purchases like cars and houses.
  • Credit accounts let you buy things like furniture or appliances and pay them off over time.  Interest is charged on the total amount and included in your monthly payment. 


Remember!  Every type of credit costs money, so it’s important to shop around to compare costs and see which type of credit is best for you.