Copyright Goodheart-Willcox Co., Inc. Chapter 8 Consumer Services 221 There are regular reports of security breaches. In these breaches, individuals’ identities are stolen. These identities may include fi nancial data. Anyone using electronic banking, debit cards, or money transfer apps should take great care to keep account numbers, IDs, and passwords protected. Passwords should also be changed regularly. Using Credit Wisely Using credit involves buying or borrowing now and paying later. People use credit for many reasons. They might use credit to meet personal expenses, purchase a consumer good, fi nance an education, or buy a car or house. Several different types of credit are available, depending on a person’s needs. These include installment credit, noninstallment credit, and revolving credit. Installment credit is a cash loan repaid with interest in equal, regular payments. Installment credit may be obtained from a number of sources. These include fi nancial institutions and mortgage and credit card companies. This type of credit is typically used for larger purchases, such as a car or home. Student loans are another form of installment credit. These loans can offer students more affordable payments for higher education costs. Payments start immediately after the education is completed. This may come at a difficult time, when graduates are just starting to establish themselves or having trouble fi nding employment. These loans must be repaid, however, and cannot be defaulted (failed to pay). If a person defaults on a federal student loan (which is the most common form of student loan), there are serious consequences (Figure 8.19). Similar to installment credit, in which payments are made and interest charges are assessed, noninstallment credit is offered by a fi nancial institution or merchant to a consumer. The major difference is that, with noninstallment credit, the entire balance is expected to be paid at once on a short-term loan—generally in one month. Interest may or may not be charged on noninstallment credit. Most credit cards are a form of revolving credit. The lender determines a credit line, or maximum amount of credit offered. The consumer uses the revolving credit line throughout a month to make purchases. A month-end statement is sent to the consumer. He or she must pay some or all of the balance. The loan amount at any moment, then, is not fi xed. It revolves around the amount purchased and payments made. Bloomua/Shutterstock.com Figure 8.18 Many banks now provide options for mobile banking, making electronic banking even more convenient. Does your bank offer a mobile banking app?