Travel and Entertainment credit cards also require the entire balance be repaid in thirty days. Examples of these are Carte Blanche and American Express. Open-ended credit gives the consumer a choice. A person may make repayment of the total debt in the first month or make a series of monthly payments that include a finance charge. A finance charge , a cost of credit, is the total dollar amount the lender charges the consumer for the borrowed money.
Interest makes up the largest share of finance charges.
Other costs, such as fees for a credit investigation, loan application, or credit or disability life insurance, may also be included. Open-ended credit allows the borrower to use previously established credit without having to reapply each time credit is used. The consumer may continue to make charges against the account as long as the total debt is below the credit limit. The credit limit is the maximum debt that may be outstanding on the account. Open-ended credit accounts include bank credit cards, affinity cards, retailer specific cards, and personal lines of credit.