The most fascinating thing about credit is it allows consumers to finance transactions without having to pay the full cost of the total billing at the time of the transaction.
It is helpful because consumers can buy the product in credit form and can pay it according to the contract. The most common means of consumer credit is a credit card account issued by a bank.
Now a days mostly each and every financial institution have given this opportunity to their customers. Merchants may also provide financing for products which they sell.
Banks may directly finance purchases through loans and mortgages; in that case small business people are getting real help for outsourcing their product and not wasting their total gross amount.
It is well protected in federal and state statutory laws. These laws protect consumers and provide guidelines for the credit industry.
Different countries have issued different rules to maintain various statutes regulating consumer credit.
The Uniform Consumer Credit Code has been adopted in eleven states and Guam. Its purpose is to protect consumers obtaining credit to finance their transactions; so while using this credit system, adequate credit is provided to consumers, and also to govern the credit industry in general.
Laws are there in the name of the Consumer Credit Protection Act which regulates the consumer credit industry; it helps the creditors to disclose credit terms to consumers so that there might not be any hidden pros and cons.
The Consumer Credit Protection Act also protects consumers from big bite loans, restricts the lucrative use of wages, and established the National Commission on Consumer Finance to investigate the consumer finance industry so that it can run credit smoothly.