To compare revolving credit and closed-end credit, here's how you would generally categorize the terms you provided:
Revolving Credit:
- Credit Cards: These are a common form of revolving credit where you have a credit limit and can borrow against it, repay, and borrow again.
- Home-Equity Line of Credit: Similar to credit cards, this allows you to borrow against the equity in your home up to a limit, with the ability to borrow, repay, and borrow again.
Closed-End Credit:
- Mortgage Loan: This is a type of closed-end credit where you borrow a specific amount for a specific purpose (buying a home) and repay it over time through scheduled payments.
- Car Lease: While leasing a car typically involves paying for the use of the vehicle over time, it is often categorized as a form of closed-end credit because it usually involves a fixed term and specific payment amounts until the end of the lease.
So, you would place the labels accordingly:
-
Revolving Credit:
- Credit Cards
- Home-Equity Line of Credit
-
Closed-End Credit:
- Mortgage Loan
- Car Lease