Review questions what is closed-end credit? what is open-end or revolving credit? what is collateral? what are smart cards? what are debit cards? how do debit cards differ from credit cards?

closed-end credit:

type of credit that should be repaid in full amount by the end of the term, by a specified date. repayment includes all the interests and financial charges agreed at the signing of the credit agreement and includes all kinds of mortgage lending and car loans.

open-end credit:

pre-approved loan between a financial institution and borrower that may be used repeatedly up to a certain limit. it can afterward be paid back prior to payments becoming due. the pre-approved amount will be set out in the agreement between the lender and the borrower.

revolving credit:

credit that is automatically renewed as debts are paid off. it does not have a fixed number of payments. credit cards are an example of revolving credit.

collateral:

something pledged as security for repayment of a loan, to be forfeited in the event of a default. you can use many kinds of property as collateral for a business loan. if you don't make the loan payments, the lender has the right to your property.

debit cards:

a debit card is a payment card that lets you make secure and easy purchases online and in person. it draws money directly from your checking account. you're not borrowing because the money on your debit card because its your own, and you can use it to access your cash at atms.

credit vs debit cards:

debit cards allow bank customers to spend money by drawing their own funds they have deposited at the bank.

credit cards allow consumers to borrow money from the card issuer up to a certain limit in order to purchase items or withdraw cash.

(credit to all the websites on google i searched these up on)

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