The two basic forms of credit are business and consumer. The chief function of business credit is the transfer of capital from those who own it to those who can use it, in the expectation that the profit from its use will exceed the interest payable on the loan. Consumer credit permits the purchase of retail goods and services with little or no down payment in cash. In installment buying and selling, the consumer agrees to make payments at specific intervals in set amounts. Credit cards are issued by local and national retailers and by banks.
Cardholders usually pay an annual fee and a monthly interest charge on the unpaid balance.
The major bank cards also provide short-term personal loans. Usury , in law, a payment of interest, by a borrower to a lender for the use of money, in excess of the amount fixed by statute. In the U.S. the permissible maximum interest rate varies among the states. In the early 1980s, several states had removed all ceilings on interest rates. The remainder of the states fix a legal interest rate, which determines the amount that is collectible in the absence of a definite agreement between the parties, and some states fix a maximum interest rate that may be charged by agreement, or contract, between the parties.