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Which type of credit allows you to request a limit increase if payments are made on time?Non-installment creditSecured creditRevolving creditInstallment credit

Question

Which type of credit allows you to request a limit increase if payments are made on time?

  • Non-installment credit
  • Secured credit
  • Revolving credit
  • Installment credit
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Solution

To determine which type of credit allows you to request a limit increase if payments are made on time, let's analyze the options provided:

  1. Non-installment credit: Non-installment credit refers to a type of credit where the borrower is not required to make regular fixed payments. This type of credit does not typically offer the option to request a limit increase based on timely payments.

  2. Secured credit: Secured credit is a type of credit that is backed by collateral, such as a car or a house. While making timely payments on secured credit can positively impact your credit score, it does not necessarily guarantee the ability to request a limit increase.

  3. Revolving credit: Revolving credit is a type of credit that allows you to borrow up to a certain limit and make payments based on the amount borrowed. This type of credit often offers the option to request a limit increase if payments are consistently made on time. Examples of revolving credit include credit cards and lines of credit.

  4. Installment credit: Installment credit refers to a type of credit where the borrower agrees to make fixed payments over a specific period of time. Unlike revolving credit, installment credit does not typically offer the option to request a limit increase based on timely payments.

Based on the above analysis, the type of credit that allows you to request a limit increase if payments are made on time is revolving credit.

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