Arthur Morris originated the installment loan. His Morris Plan,
the first to make credit available to the average citizen, began in 1916 despite common wisdom that lending money to working people was doomed to failure. Today, it’s hard to imagine how the US economy could function without credit. Using credit means being able to buy the things or services you need or want by borrowing the money to pay for them. When you arrange for credit, you agree to repay the lender the amount you have borrowed. You typically pay a finance charge, calculated as a percentage of the amount you borrowed, for the opportunity to use the credit. Loans and lines of credit, of which credit cards are the best-known example, are the types of credit people use most often. Loans allow you to borrow a specific amount as a lump sum and repay over time. Lines of credit give you revolving access to a fixed sum of money. Revolving means that as soon as you repay what you have borrowed, you can borrow it again. Creditors are willing, and often eager, to advance you the principal, or money you borrow, because they make money on the finance charges you   Read more…