What financial instrument allows customers to purchase now and pay later?

A line of credit is a financial instrument that enables customers to purchase items or services immediately and pay for them over time. This type of borrowing provides flexibility, allowing customers to access a certain amount of funds, which they can use as needed. They can purchase products or pay for services upfront while repaying the line of credit over time, typically with interest, based on the amount used.

In contrast, a debit card requires the funds to be immediately available in the user's bank account, so customers cannot spend beyond their account balance. Cash transactions involve immediate payment without the possibility of deferred payment. Personal loans, while they do allow for large purchases with repayment over time, usually require a lump-sum amount to be borrowed and paid back over time, rather than the ongoing, flexible access that a line of credit provides. Therefore, a line of credit best aligns with the concept of "purchase now and pay later."