Question

Why is credit a helpful tool for businesses and consumers?

A. It prevents banks from charging them interest on loans.
B. It rewards them for saving a large percentage of their earnings.
C. It allows them to borrow money that can be paid back later.
D. It keeps their money safe and easily accessible in a bank.

Answer 1

Credit is a helpful tool for both businesses and consumers. It allows them to borrow money that can be paid back later, enabling them to make large purchases and invest in growth and expansion. However, responsible use of credit is crucial to avoid falling into debt.

Step-by-step explanation:

Credit is a helpful tool for both businesses and consumers because it allows them to borrow money that can be paid back later. When used responsibly, credit can help consumers make large purchases, such as buying a car or a house, without having to pay the full amount upfront. For businesses, credit can provide a way to invest in growth and expansion by accessing funds for purchasing inventory, equipment, or hiring employees.

Moreover, credit also helps consumers and businesses build a credit history and credit score. A good credit score can unlock more favorable loan terms and interest rates, making it easier to access credit in the future. It is important to note that while credit can be helpful, it is crucial to use it responsibly and make timely payments to avoid falling into debt.