3
QuizMultiple Choice

Study Guide and Quiz

Question 3 • S25 Introduction to Business A (Theisen)

How is a line of credit similar to a credit card?

Answer
A
Interest is charged only on the amount you actually borrow.
B
The interest rates are the same.
C
They both require co-signers.
D
Lenders don't check your credit score.

Explanation

Both a line of credit and a credit card let you borrow up to a limit and pay interest on the amount you use, rather than the full limit. Their interest rates can differ, and lenders commonly check credit scores, so those statements are not reliable similarities.

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