An example of this type of credit is your monthly utility bill. Revolving credit accounts differ from a regular charge account. A maximum balance per customer is established and new purchases may be made as long as the balance remains below the maximum. Also, a monthly minimum payment of only a portion of the balance, usually five to 10 percent, is required, but any amount above that may be paid. The finance charge is usually calculated on the unpaid balance.
Credit cards are of several types.
Single-use credit cards are issued by department stores and oil companies. This kind of credit card is issued for the convenience of the consumer and to promote brand or store loyalty. It provides the easy credit features of the revolving charge account with the convenience of the regular 30-day charge. Most goods and services available from the issuing company can be charged on the card. If the bill is paid within the allowable period, usually 25 to 30 days from the date of the billing, there is no direct charge for using credit.