Sales credit and cash credit are the two basic types of consumer credit. Sales credit is used to buy goods and services with a credit card or charge account. Cash credit is when money is borrowed, which may either be secured (with collateral) or unsecured. Each type comes in different forms and from different sources to meet different consumer needs. Many credit cards can be used for both.

There are many reasons to use credit. People enjoy the use of goods and services while they pay for them. An example would be a car loan. The customer pays for the car in set payments, but can use the car before all the payments are made. A house is a costly item that is usually difficult to purchase with cash, unless the person is rich. Many people find it difficult to save for an item like a house, but can still purchase it on credit. Credit can also offer te

The information in a credit record is valuable to companies who grant credit. A credit report largely determines weather or not one can get credit when they need it. With a poor report it is difficult to get money from reputable creditors, and very high finance charges will probably apply.

The use of credit can have major disadvantages on the macro economic level also. When consumers use credit to buy goods and services, it increases the demand for whatever they are buying. If the demand increases faster than the the supply, prices will increase, which is an effect of supply and demand. When the government, businesses, and consumers all use credit excessively, inflation results. The economy weakens and fewer job opportunities exist.

mporary help as a source of cash for emergencies or unexpected expenses. Examples include a big medical bill or car trouble away from home. Convenience is perhaps the biggest reason people use credit. Credit is a practical way to pay for telephone and utility services. Another advantage is that people do not need to carry large amounts of cash while on vacation or when shopping. It also provides a record of purchases. Exchanges, returns, and mail orders are usually simplified by using credit.

Credit is a convenient and important aspect of Americans lives. Used carefully and wisely it can help people get more of the things they need when they need them. Misused credit can lead to financial disaster. Credit supports mass production, may help new products, strengthens our economy, and can raise the standard of living. It plays an important role in personal economics as well as the economy of the United States.

The use of credit by so many people had a great impact on the macro economic level. Due to the increase in sales, the industry grew rapidly, bringing job opportunities. New businesses emerged. This is another positive side to consumer credit in the economy in one industry.

This brings us to the principle of economics, supply and demand. Credit allows more people to p

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