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Credit Use

Credit is widely used all over the world today. Modern credit cards began in 1958, and have grown like wildfire ever since. Credit is a method of payment for merchandise, or a line of cash to be borrowed, that is extended to a person or business. Credit cards offer a type of borrowing called revolving credit, where payments are open-ended, and the balance can be added to until the limit is reached. This is different from installment credit, where there are a fixed number of payments that must be paid within a set time period, and it cannot be added to.

Records of credit use are kept in a credit record, or credit history. This is then used in the future, when a person wants to apply for a new loan, or additional consumer or business credit. The limit is the highest amount of credit extended by the lender; it is also referred to as the line of credit. Credit may be Browserspiele extended by a bank, a financial institution, credit union, business merchant, or private lender. There are costs to the lender for offering major credit cards like Visa or MasterCard.

Credit cards differ from charge cards, because the credit card allows extended payments, where the charge cards require full payment each month. Credit cards charge interest and fees, and may allow balance transfers of other accounts. Security and fraud are important issues, and care must be taken to prevent theft. PIN number, security codes, and verification try to combat this issue. Credit cards are secured, non-secured, and pre-paid. Some credit cards offer rewards.

Businesses may use credit accounts for liquidity in daily operations. Consumers occasionally use credit cards to start up a small business. Credit card issuers are facing new government regulations to protect consumers in 2010.