 TITLE: An Essential Guide to How Credit Works CONTENT: What Are the Types of Credit Accounts?\n--------------------------------------\nThere are two primary types of credit accounts you may come across, depending on the situation and your needs: installment and revolving.\n### Installment Credit\nInstallment credit involves a lender extending an amount of credit upfront, and you agreeing to repay the debt in regular installments over a fixed period. Most loans, including mortgages, auto loans, student loans and personal loans, are considered installment credit.\nDepending on the type of loan, the repayment period with installment credit can range from months to several years or even decades. And while payments may not be fixed for the life of the loan, especially when a variable interest rate is involved, you'll typically always know when the loan will be repaid in full.\n### Revolving Credit\nRevolving credit allows consumers to borrow money using a line of credit when they need it, rather than getting it all in the beginning. You can typically borrow up to a certain limit, but once you pay down some or all of the debt you've incurred, you can re-borrow up to that same limit, repeating the process over and over again.\nCredit cards are the most popular form of revolving credit, although lines of credit also fall into this category. Unlike installment credit, revolving credit doesn't have a set repayment period. And if you have no debt outstanding at the moment, you aren't required to make any payments.\nThat said, revolving credit can become expensive if you carry a balance over time and make just the minimum required payments. END