Open-ended credit refers to credit that is extended on a continuous basis, up to a specified maximum limit, for purchases of products and services. Credit cards and home equity credit lines are examples of open-ended credit. The other type of credit is closed-end credit which involves a one-time installment loan, usually for "big ticket" items such as a car or furniture. With open-ended credit, borrowers can make payments of varying amounts. With closed-end credit, the number of payments and amount of each payment is fixed.
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