Question

A credit limit is: A. A company's total debt B. The maximum that a creditor will allow a customer to owe at any point in time C. The property that a company pledges to guarantee repayment D. The maximum that a company can borrow

Answer 1

Answer:

B. The maximum that a creditor will allow a customer to owe at any point in time

Explanation:

Credit limit also referred to as a credit line is the maximum amount of money a lender can extend to a client. Lenders often times set the credit limit based on the individual's credit history. This is to determine if the client is credit worry.

There are two categories of borrowers, which are; high-risk borrowers and low-risk borrowers.

Answer 2

Answer:

The correct option is B

Explanation:

The term credit limit refers to the maximum amount of credit a financial institution extends to a client. A lending institution extends a credit limit on a credit card or a line of credit.

A credit limit is one of the factors that affect consumers' credit scores and can impact their ability to get credit in the future.

A lender usually gives high-risk borrowers lower credit limits because they may not be able to repay the debt. Low-risk debtors usually get higher credit limits, giving them greater flexibility when they spend.