Question

what does an increase in credit card limit allow the cardholder to do? (1 point)
○ charge purchases up to the new limit
○ pay lower annual percentage rates
○ reduce monthly credit card fees
○ automatically improve credit score

Explanation:

• An increase in credit card limit means the cardholder can spend (charge purchases) up to that new, higher limit.
• A credit card limit increase does not directly lead to lower annual percentage rates (APR is set by the issuer and related to creditworthiness/terms, not just limit), nor does it reduce monthly fees (fees are based on card type/agreement, not limit), and it doesn't automatically improve credit score (credit score depends on factors like payment history, credit utilization ratio - while a higher limit can help utilization if used responsibly, it's not an automatic improvement).

Answer:

A. Charge purchases up to the new limit