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What is the difference between open-end credit, and closed-end credit, and what are the costs associated with each?

ANSWER: Closed-end credit is a form of credit that must be paid off by a specific date. Open-end credit is an amount of credit that can be borrowed repeatedly as long as consistent payments are made according to the bank’s terms. The cost of these types of credit are fees and interest rates charged by the lender.

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1. Closed end credit must be paid off by a specific set dat

2. open end credit can be borrowed repeatedly

3. Both of these credits charge interest

4. both may charge fees, and an example would be when minimum payments aren't being made.

this answer is precise and a correct expectation of what the written response should be in the assignment, hope it helps !

Closed-end credit is a type of credit that has a deadline for repayment.

Open-end credit is a line of credit that can be borrowed again and again as long as payments are completed on time and in accordance with the bank's requirements. Fees and interest rates charged by the lender are the costs of these sorts of credit.

Open-end credit and Closed-end credit:

  • Open-end credit: Any sort of loan that allows you to make several withdrawals and repayments is known as open-end credit. Credit cards, home equity loans, personal lines of credit, and bank account overdraft protection are all examples.
  • Closed-end credit: is a sort of credit that must be paid back in full by the end of the term, on a specific day. All interest and financial charges agreed upon at the time of the credit agreement's signing are included in the repayment. All types of home lending and car loans are closed-end credits.

For more information about Open-end credit and Closed-end credit refer to the link:

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