25
AssignmentMultiple Select

The Cost of Credit

Question 25 • 2027 Ignite Financial Literacy-Personal Finance - EL3403

Check each statement included in your response.

Answer
A
Closed-end credit is a form of credit that must be paid off by a specific date.
B
Open-end credit can be borrowed against over and over.
C
Both forms of credit charge interest.
D
Both forms may charge fees, particularly when minimum payments are not made.

Explanation

Closed-end credit is borrowed as a set amount and repaid on a schedule, with a specific payoff date. Open-end credit, such as a credit card, lets you borrow, repay, and borrow again up to a limit. Both types generally charge interest, and either may also charge fees, such as a late fee when a required payment is missed.

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