Credits

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The seventh topic is Credits. In, this topic they explained about the meaning of credits in accounting, the advantages and the disadvantages of credits, and the types of credit. They explained that credits in accounting is an accounting entry that increases a liability or equity account or decreases an asset or expense account. There have the advantages of credits card, such as you don't need to carry cash, able to buy needed items now, can save your time and trouble, and help you to track your expenses. You don't need to carry cash means when you want to buy something that you need and at that time you didn't bring money to buy that things so you can used credit card. Able to buy needed items now means when you want to buy needed items you don't need to think about your money, you can use the credit card to but that items. Can save your time and trouble means when you want to buy something that you need, and that time you didn't bring enough money, so you don't need to search for an ATM but you can used that credit card. Help you to track your expenses means that some cards provide year end summaries that really help out. Credit card not only have the advantages but also have the disadvantages. the disadvantages of credit card is high cost fees; unexpected fees; and teaser rates. High cost fees means that your purchase will suddenly become much more expensive if you carry a balance or miss a payment. Unexpected fees means you'll pay between 2 and 4 percent just to get the cash advance; also cash advances usually carry high interest rates. Teaser rates  means low introductory rates may be an attractive option, but they last only for a limited time. When the teaser rate expires, the interest rate charged on your balance can jump dramatically.
 

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There have 3 types of credits such as single payment credit, installment credit, and revolving credit. The examples of single payment credit are cell phone use ( you use texting each day and pay once a month); electrical use ( you use your electricity each day and pay once a month); and internet use ( you use the internet each day and you will pay once a month). Installment credit is a type of credit that has a fixed number of payments, in contrast to revolving credit. Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Credit cards are an example of revolving credit used by consumers.