Which term refers to the ability to obtain goods or services before payment, based on trust that payment will be made in the future?

Which term refers to the ability to obtain goods or services before payment, based on trust that payment will be made in the future?

• A. Credit
• B. Debit
• C. Budget
• D. Wages

Answer: (A)

Obtaining goods or services now and paying later is credit. It relies on trust that you will pay the lender in the future, often under agreed terms and sometimes with interest. This lets you buy things you don’t have cash for right away, but it does create a debt you’ll need to repay. Debit, by contrast, involves paying with money you already have at the moment, taking funds directly from your account. A budget is simply a plan for how you will spend and save money. Wages are the money you earn from working, not a way to borrow to buy now.

Obtaining goods or services now and paying later is credit. It relies on trust that you will pay the lender in the future, often under agreed terms and sometimes with interest. This lets you buy things you don’t have cash for right away, but it does create a debt you’ll need to repay.

Debit, by contrast, involves paying with money you already have at the moment, taking funds directly from your account. A budget is simply a plan for how you will spend and save money. Wages are the money you earn from working, not a way to borrow to buy now.