Asked by Jeeva Senthilnathan on May 06, 2024
Verified
The type of credit that operates like a revolving credit account where customers can purchase goods up to a certain dollar limit without a new credit check for each purchase is known as a/an ______.
A) open charge account
B) installment account
C) line of credit
D) debit card
Open Charge Account
A credit account that allows the holder to make purchases and pay for them at a later date without a predefined payment schedule.
Installment Account
A credit account where the borrower repays the principal and interest over a set period through scheduled payments.
Line of Credit
A flexible loan arrangement with a financial institution that allows a borrower to draw funds up to a specified limit, repay, and redraw as needed.
- Familiarize yourself with the various credit solutions offered in the business environment.
Verified Answer
NC
Nesha Crawford__May 10, 2024
Final Answer :
C
Explanation :
A line of credit operates as a revolving credit account, allowing customers to borrow up to a certain limit without needing a new credit check for each transaction. This flexibility makes it distinct from options like installment accounts, which typically involve fixed payments over time for a specific purchase.
Learning Objectives
- Familiarize yourself with the various credit solutions offered in the business environment.