Another form of credit is commonly called "personal," or "consumptive," credit, on the theory that such credits "spend themselves in the consumption or annihilation of necessities and articles of luxury as opposed to those utilities of credit which assume a productive or distributive character." This kind of credit was the earliest historically, and gave birth to our credit system by educating men in the honest keeping of contracts; but personal credit constitutes a relatively small fraction of present-day credits and is discouraged by credit-givers.

Still another form of credit may be specified in this classification on the basis of uses to which the funds are devoted. It is "public" credit. The debtor is the body politic, and the funds raised are diverted to the uses of the state. Such credits are usually long term and, being strictly financial credits, partake of the qualities of the bonded debt of corporations.