What is the term used for the ability to buy now and pay later?

The term that refers to the ability to buy now and pay later is credit. Credit allows consumers to make purchases and defer payments to a later date, often enabling them to acquire goods or services immediately without having the full payment upfront. This system is based on the trust that the consumer will pay back the borrowed amount, usually over time, with possible interest added.

In contrast, a debit involves using funds that are already available in a checking account, meaning payment is immediate. A loan implies a specific sum borrowed for a particular purpose, typically requiring repayment according to terms set by the lender. A mortgage is a specific type of loan used to purchase real estate, secured by the property itself and involving a long-term repayment schedule.

Credit, therefore, is distinct in that it encompasses various forms of borrowing with flexible repayment terms, allowing for immediate purchasing power that aligns with the answer provided.