| A | B |
|---|
| Credit | receiving goods or services today |
| Monthly Payment includes | amount of money + interest |
| Cash and carry | saving and paying cash instead of spending future income |
| Closed end credit | installment credit |
| Installment credit | a loan you must pay back in a specified equal number of equal monthly payments |
| Open-ended credit | revolving credit |
| Revolving credit | extended line of credit established in advance |
| Benefit of revolving credit | loan may be paid in full or a series of unequal payments |
| Benefit of installment credit | contract outlines repayment terms |
| Examples of installment credit | mortgage, car loan, student loan, and personal loan |
| Examples of revolving credit | credit card |
| Recommended amount to borrow | 20% of annual net income; monthly payment should be less than 10% of net income |
