How does decreasing your credit card balance affect your income statement?(1 point) Responses It increases your monthly expenses, increasing the amount you spend each month. It increases your monthly expenses, increasing the amount you spend each month. It increases your monthly expenses, giving you more money to spend on other things. It increases your monthly expenses, giving you more money to spend on other things. It decreases your monthly expenses, increasing the amount you spend each month. It decreases your monthly expenses, increasing the amount you spend each month. It decreases your monthly expenses, giving you more money to spend on other things.

Question

GPT-4o mini · Answer

Decreasing your credit card balance primarily affects your income statement by decreasing your monthly expenses. This is because when you pay down your credit card debt, you reduce the interest charges that you would incur if you maintained a higher balance.

The correct response is: It decreases your monthly expenses, giving you more money to spend on other things.

By lowering your credit card balance, you effectively free up more of your income for savings or discretionary spending since you'll be paying less in interest or fees moving forward.