A line of credit does not resemble a personal credit card. Indicate w

A line of credit does not resemble a personal credit card.

Indicate whether the statement is true or false.

ANSWER

Answer: FALSE
Explanation: A line of credit requirement might be that the line of credit remains at a zero balance for a clean-up period. This is similar to a personal credit card in that it gives you a pre-arranged borrowing amount up to a maximum. It is also similar to a credit card in that you have to make periodic payments that in a sense “clean up” the account so your loan does not get out of hand. Like a line of credit, a personal credit card loan charges fees for the use of the money. With lines of credit, this fee (interest rate) typically floats, based on the prevailing market interest rates, whereas your credit card rate is fixed. Thus, a line of credit DOES RESEMBLE a personal credit card, despite some differences.