What is Credit?
Simply put, credit is borrowed money that you can use to purchase products and services. You get credit from a credit grantor, who you agree to pay back any amount spent/borrowed within an agreed-upon time, plus any applicable charges or fees.
Four Type of Credit
- Revolving credit – This is one of the most common types of credit. With revolving credit, you are given a maximum credit limit (for example, $5,000), and you can make purchases/charges up to that limit at any given time. Credit cards and home equity lines of credit are popular forms of revolving credit. They usually require minimum monthly payments and accrue interest if you carry a balance from month to month.
- Installment credit – This is another popular form of credit. Installment credit generally refers to a loan for a set amount of money with a fixed, recurring payment schedule. An example of this would be, you borrow $15,000 to purchase a new car and you have a term of 48 months to pay the balance off. There are numerous types of installment loans, including student loans, mortgages, auto loans, personal loans, and more.
- Open credit – This is a somewhat rare type of credit. A person can borrow up to a maximum amount (like a credit card), but it must be paid back in full each month. An example of open credit is a charge card, which is not the same thing as a credit card.
- Service credit – Most people use a form of service credit every day, from heat, electricity, phone, and similar services. Service credit is often one of the first forms of credit acquired by a person starting out on their own. Since this of credit is typically one of the first forms of credit utilized by a person, it’s important to stay on top of payments in the early years to establish a solid credit history.
Select Rewards Credit Card
Earn 2x Cash Back
You earn two reward points for every dollar spent on every purchase with a Select Rewards Credit Card. If rewards aren’t your thing, consider a Select Credit Card with its low rate.
Credit card approval depends on creditworthiness and other qualifications. Rates, terms, and conditions are subject to change without notice. Cardholders are advised to refer to the credit card agreement and rewards program terms for comprehensive details on point redemption, limitations, expiration, and other pertinent information. Some restrictions may apply. The annual percentage rate (APR) will vary with the market based on Prime Rate. Two reward points are earned per $1 spent on qualifying purchase transactions. Transactions associated with gambling, sports betting and/or gaming purchases not eligible to accrue reward points.
Have Questions?
Stop by a local branch, or give us a call at 800.442.2800, and our team would be happy to assist you!