ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The two most common types of credit accounts are installment credit and revolving credit, and credit cards are considered revolving credit.

Detailed explanation-2: -A line of credit is a credit facility extended by a bank or other financial institution to a government, business or individual customer that enables the customer to draw on the facility when the customer needs funds.

Detailed explanation-3: -A personal line of credit may be used for unexpected expenses or consolidating higher interest rate loans. Interest rates are usually lower than for credit cards and personal loans.

Detailed explanation-4: -Similar to a credit card with a set credit limit, a line of credit is a defined amount of money that you can access as needed and use as you wish. Then, you can repay what you used immediately or over time. As with a loan, you will pay interest using a line of credit.