Question

Handyman Hardware, a small community-based store, offers its consumers the option of using credit. Creditworthy individuals are able to use the "HH Credit Card" for all purchases up to a credit limit of $1,000. Consumers are required to pay at least 20 percent of their outstanding balance at the end of each month. A 2 percent finance charge is assessed on the unpaid balance at the end of each billing cycle. Handyman Hardware is employing ____ in its business.

A. Deferred payment strategy
B. Layaway plan
C. Revolving credit strategy
D. Zero-interest financing

Answer 1

Handyman Hardware is employing the revolving credit strategy by offering its consumers the option of using the "HH Credit Card" with a credit limit of $1,000. Option C.

Step-by-step explanation:

The business strategy employed by Handyman Hardware is Revolving credit strategy. This strategy allows creditworthy individuals to use the "HH Credit Card" for all purchases up to a credit limit of $1,000.

This credit strategy requires consumers to pay at least 20 percent of their outstanding balance at the end of each month. Additionally, a 2 percent finance charge is assessed on the unpaid balance at the end of each billing cycle.

With revolving credit, consumers can use their credit card to make purchases, and as they pay off their balance, the credit becomes available to use again. So Option C.