Question

what is the primary risk associated with not paying off credit card balances each month?
a. high interest charges
b. decreasing credit score
c. increased spending limits
d. losing the credit card

Explanation:

When credit card balances are not paid off monthly, credit card companies typically charge high interest rates (often compounded). This is a direct and immediate financial consequence. A decreasing credit score (b) can occur if payments are missed entirely (not just carrying a balance), but the primary risk for not paying off balances (even if minimum payments are made) is high interest. Increased spending limits (c) are unlikely as carrying balances may signal risk to the issuer. Losing the card (d) is extreme and not the primary, common risk.

Answer:

A. High interest charges