Question

which describes an example of using unsecured credit?

someone buys new gutters for a home with a credit card.
someone buys a new vehicle with a loan from a car dealer.
someone buys a new home with a mortgage from a bank.
someone buys a new boat with a loan from a boat dealer.

Explanation:

Unsecured credit is credit not backed by collateral. A credit card purchase (buying gutters with a credit card) is unsecured, as the credit card debt isn’t tied to specific collateral like a vehicle, home, or boat (which are secured by the asset being purchased). The other options involve loans secured by the vehicle, home, or boat.

Answer:

A. Someone buys new gutters for a home with a credit card.