Which of the following accurately describes credit cards?

Study for the FDIC AIDT Ready-To-Work (RTW) Money Smart Exam. Practice with multiple-choice questions, each with hints and explanations. Prepare for your assessment!

Credit cards function as a means of borrowing money to make purchases for goods and services, allowing consumers to pay for these items over time rather than requiring payment upfront. When a consumer uses a credit card, they receive a line of credit, which means they can buy now and repay the amount borrowed later, typically with interest if the balance is not paid in full by the due date. This flexibility is one of the key features that make credit cards a popular payment method.

The other options do not accurately describe credit cards. While they can be used for online purchases, they are not limited to that context. Additionally, credit cards do not require payment upfront, which distinguishes them from debit cards or cash transactions.

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