types credit

credit cards

What They Are: Plastic cards issued by banks that allow you to borrow and spend loaned money.

Advantages:

Convenient for making purchases.
Can build credit history if used responsibly.
Offers rewards and cashback on purchases.
Disadvantages:
- High interest rates if you don't pay the full balance each month.
- Easy to overspend and get in debt.

loans

What They Are: Borrowed money that you must repay with interest over a set period.

Advantages:
- Allows you to make large purchases like cars or homes that you can't afford to pay for all at once.
Disadvantages:
- Interest rates and fees can make the loan expensive over time.
- Missing payments can harm your credit score.