Which statement describes open-end credit?

Open-end credit is a type of borrowing that provides the borrower with the flexibility to access funds up to a predetermined limit multiple times, rather than being restricted to a single borrowing event. This means that individuals can withdraw money, repay it, and then borrow again as needed, which allows for ongoing access to credit.

This flexibility makes open-end credit ideal for managing cash flow needs or unexpected expenses, as borrowers can utilize the available funds based on their current financial situation. It also typically involves monthly payments based on the outstanding balance, rather than requiring payment of the full amount borrowed at once. Such features contrast with closed-end credit, which provides a fixed loan amount to be repaid over a set term without the ability to borrow again once that loan is settled.

In this context, options such as a fixed borrowing amount or a one-time borrowing option do not accurately reflect the nature of open-end credit. Additionally, the assumption of being interest-free for the entire period of borrowing does not align with the standard terms of open-end credit, where interest typically accrues on the outstanding balance.