What are some examples of revolving credit?
Examples of revolving credit include credit cards and lines of credit, such as overdraft protection for your checking account and a home equity line of credit (HELOC). What is secured and unsecured credit? Secured credit requires collateral (security) for the loan. If you don’t repay the loan according to the terms of the credit agreement, the lender can take the collateral. A car loan and a mortgage are examples of secured loans—if you don’t make your payments the lender can repossess your car or foreclose on your home. Credit card debt is unsecured, which means that the card issuer cannot take your property (even the things you buy with the credit card) if you do not make your payments. The card issuer can, however, sue you to recover the money you owe. If the company wins the lawsuit, it may be able to garnish your wages or put a lien on your property. Because the credit they provide is unsecured, credit cards typically carry higher interest rates than mortgages or car loans. What i
