What does credit allow customers to do?

Credit allows customers to obtain goods or services before making payment. This concept is fundamental to how credit functions, as it enables consumers to receive products or services immediately while deferring payment to a later date. Credit essentially acts as a loan provided by a lender or financial institution, allowing the customer to enjoy the benefit of a purchase even if they do not have the immediate funds available.

Understanding credit is critical in consumer finance, as it can lead to building a positive credit history when payments are made on time. This is beneficial for future borrowing, as individuals may have access to larger amounts of credit or better interest rates based on responsible credit use. In contrast, the other options either describe payment methods that involve immediate transactions or restrict purchasing power to cash-only, which is not representative of the flexible nature of credit.