ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It is a continuous loan the borrower must repay with a revolving balance
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It is for a specific purchase, for a specific amount of time.
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Credit limits vary depending on the loan balance
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Interest rates vary depending on the repayment history
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Detailed explanation-1: -The main difference between open-end credit and closed-end credit is this: Closed-end credit is taken out once, and has a specific repayment date; open-end credit, like credit cards, can be drawn from again and again, and there’s no fixed due date for paying the balance in full.
Detailed explanation-2: -Open end credit is when a borrower can spend up to a certain amount. This has varying payment depending on how much you spend. One example of open end credit is credit cards. Closed end credit is a loan for a stated amount that must be repaid in full by a certain date.
Detailed explanation-3: -If you take out an installment loan, such as an auto loan, this is a form of closed-end credit with a fixed interest rate and payment. Open-end credit, on the other hand, is revolving credit that allows you to continually access money as you make payments and only pay interest on what you use.
Detailed explanation-4: -A Schumer Box is a required summary of a credit card’s rates and fees that is visible in credit card agreements. It shows what the card will cost consumers, including the various annual percentage rates (APRs), an annual fee, a cash advance fee, a late payment fee, and a returned payment fee, among other expenses.