Which concept describes the credit facility available to the consumer and its impact on buying behavior, especially with liberal terms and EMI options?

• A. Liquid Assets
• B. Marketing Campaign
• C. Savings
• D. Consumer Credit

Answer: (D)

Consumer credit is the arrangement that allows a consumer to buy goods or services now and repay over time, often with flexible terms and installment payments (EMIs). When lenders offer liberal terms and easy EMI options, buyers tend to perceive purchases as more affordable, so they may buy larger or more items than they would with cash or savings. This can boost overall spending because monthly payments seem manageable, even though the total cost includes interest and fees. In the long run, it can lead to higher debt if not used carefully, since the habit of paying over time can continue beyond what a person could afford with available funds.

Liquid assets are cash or assets that can be quickly converted to cash. Savings are funds set aside for future use. A marketing campaign is a promotional effort to influence buying behavior. Neither of these describes the credit facility itself and its impact on purchases through flexible terms and EMI options in the way consumer credit does.