 TITLE: Understanding Revolving Credit CONTENT: How is Revolving Credit Different from Installment?\n---------------------------------------------------\nThere are two major types of credit: revolving credit and installment credit. Installment loans allow you to borrow a set amount of money and repay it over a specified period of time in fixed monthly installments. Auto loans, student loans and mortgage loans are examples of installment loans. Once you pay off an installment loan, the account is closed; you can't go back and borrow the same amount again. With revolving credit, as soon as you pay down your balance, you can draw or spend again within your credit limit.\nInstallment loans have their pluses and minuses.\nThe big plus: You always know how much you'll be paying each month, which makes it easier to budget and plan.\nThe big minus: Installment loans aren't as flexible as revolving credit. If money is tight one month, you can't make a minimum payment on your mortgage or car loan—you have to make the full loan payment. But you can pay just the minimum on your revolving credit accounts. END