Unsecured Line of Credit

A

The correct answer to the question is C. Overdraft protection line.

An overdraft protection line is a type of open account that is offered by banks and other financial institutions. This type of account allows customers to withdraw funds from their demand deposit account or a specially designated credit line account through writing checks or making electronic transactions even if there are insufficient funds available in the account.

The overdraft protection line is designed to provide a safety net for customers in case they accidentally overspend or face unexpected expenses, such as medical bills or car repairs, that exceed the funds available in their account. By providing access to additional funds, customers can avoid bounced checks, overdraft fees, and other penalties.

When a customer uses their overdraft protection line, they are essentially borrowing funds from the bank or financial institution. The amount of the overdraft is typically subject to interest charges, which are assessed on the outstanding balance of the account until it is repaid.

It's important to note that while overdraft protection can be a useful tool, it should not be relied upon as a long-term solution for managing finances. Customers should strive to maintain a sufficient balance in their accounts and create a budget to avoid overdrawing their accounts in the first place.