You pay a finance charge on the balance you don't pay each month. Revolving credit cards are typically issued by financial institutions, or retail stores. More information on credit cards Installment credit usually comes from a lending institution, and requires you to pay the loan back over a set period, in regularly scheduled payments. You have to apply for the loan and explain its specific purpose, and you may need to make a down payment. Interest rates are often lower than for revolving credit accounts.
Installment credit is the usual way to pay for a car or make other major purchases.
Unsecured lines of credit from banks and other financial institutions are revolving credit lines that you apply for and get once, and then use over and over again as needed. Interest rates are usually lower than for installment loans or credit cards, and you don't have to pledge collateral. Usually you get special checks or a credit card to use when you want to draw on the credit line. You can use the credit line up to a specified limit, and the credit becomes available to you again as you pay off the balance. Student Loans Graduating from college with student loan debt is common today.