Which of the following offers a line of credit (i.e., a loan) that is…
2016
Which of the following offers a line of credit (i.e., a loan) that is interest-free if the monthly bill is paid on time?
Answer: A. Credit card — A credit card offers a "line of credit," which means the issuing bank lends you money up to a certain limit to make purchases. This is essentially a…
- A.
Credit card
- B.
Debit card
- C.
Chequebook
- D.
Both debit and credit cards
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Correct answer: A
A credit card offers a "line of credit," which means the issuing bank lends you money up to a certain limit to make purchases. This is essentially a short-term loan. Most credit card companies offer an interest-free grace period (usually between 20 to 50 days). If you pay your monthly statement balance in full and on time, you are not charged any interest on those purchases.