Classes and Kinds of Credit

Vocabulary definitions for different classes and kinds of credit based on the lecture notes.

Personal Credit

Credit used by individuals to buy consumer goods intended to provide immediate satisfaction to their wants and needs; also known as ‘Consumer Credit’.

Charge account

The oldest form of sales and purchase credit and a popular merchandising technique referred to as the ‘Granddaddy’ of consumer credit.

Credit Card

A device that serves to identify credit customers as those to whom the store has given a symbol of its confidence in them.

Instalment Credit

The most common type of consumer credit today, frequently referred to by individuals as ‘buying on time’.

Personal Loans (Consumer)

Money borrowed for purposes such as appliances, house repairs, medical expenses, or travel; may be granted on a signature alone for those with good credit standing.

Mercantile Credit

Also known as commercial credit or trade credit, it is granted by manufacturers, wholesalers, or jobbers as an incident of sale.

Bank Credit

Advances made to consumers by means of a loan or overdraft on a current account.

Commercial Loans

Credit granted for a short period to assist a borrower with temporary working capital needs.

Agricultural loans

Loans to farmers intended to finance the planting, improvement, and harvesting of agricultural products.

Industrial Loan

A bulk loan availed by manufacturers and public utility firms to finance the acquisition of new or additional plants and machinery.

Real Estate Loans

Loans granted specifically to finance the acquisition or improvement of real estate.

Personal Loans (Bank)

Loans generally used for consumption purposes to meet serious personal obligations.

Packing credit advances

Loans provided to exporters to finance the processing of export goods prior to shipping them to a foreign buyer.

Trust Receipts

Advances made by a bank on behalf of an importer if the importer is unable to pay for imported goods or raw materials on the due date.

Investment Credit

Advances made to a business enterprise to enable it to purchase or construct necessary plant and equipment.

Agricultural Credit

Advances used for agricultural development to provide a favorable environment and market for industrial products.

Public Credit

A term for government borrowing used as a means of pledging good faith and resources on their behalf.

Personal, Mercantile, Bank, Investment, Agricultural, Public

6 Classes of Credit

Commercial Loan, Agricultural Loan, Industrial Loan, Real Estate Loan, Personal Loan, Packing Credit Advances, Trust Receipts

7 Bank Credit