Which term is listed as a main category of credit?

Which term is listed as a main category of credit?

• A. Layaway plans
• B. Open-ended credit agreements
• C. Deferred Billing
• D. Service Credit

Answer: (B)

Open-ended credit agreements describe the revolving form of consumer credit, where you have a credit limit and can borrow, repay, and borrow again over time (like with a credit card). This ongoing access to credit up to a set limit is why it’s considered a main category of credit, distinguishing it from other arrangements that involve paying for something after the fact or in installments. Layaway plans require payment before you receive the item, deferred billing simply postpones payment, and service credit covers paying for services after use; none of these define the broad revolving-credit category the way open-ended credit does.

Open-ended credit agreements describe the revolving form of consumer credit, where you have a credit limit and can borrow, repay, and borrow again over time (like with a credit card). This ongoing access to credit up to a set limit is why it’s considered a main category of credit, distinguishing it from other arrangements that involve paying for something after the fact or in installments. Layaway plans require payment before you receive the item, deferred billing simply postpones payment, and service credit covers paying for services after use; none of these define the broad revolving-credit category the way open-ended credit does.