Which term refers to a purchase made where payment occurs at a later date?

The term that describes a purchase where payment occurs at a later date is a credit purchase. This arrangement allows consumers to acquire goods or services and defer the payment, often resulting in interest charges if not repaid within a specified period. Credit purchases typically involve the use of a credit card or an installment payment plan, enabling customers to manage their cash flow effectively while making immediate purchases.

In contrast, a cash transaction requires payment to be made at the moment of purchase, eliminating any possibility of deferred payment. A prepaid purchase involves paying upfront before receiving the goods or services, which is the opposite of deferring payment. Layaway purchases allow customers to reserve items by making a series of payments over time before they can take possession, but the total amount is still paid before the item is received. Thus, credit purchase is clearly the most suitable term for transactions where payment is delayed.