Which term best describes a scenario where cardholders exhaust their credit limits through multiple merchant numbers?

The scenario described involves cardholders utilizing multiple merchant numbers to exhaust their credit limits, which aligns with the concept of bust-out card fraud. In this type of fraud, individuals use a credit card with the intention of charging as much as possible before the issuer realizes that the cardholder is not going to pay back the accumulated debts. Typically, individuals engaging in bust-out fraud will open accounts, make small purchases to establish a payment history, and then quickly ramp up spending to reach or exceed their credit limits, often across various merchants. This behavior illustrates the consequences of credit limits being manipulated by the cardholder without intentions of repayment.

In contrast, the other terms do not adequately fit this scenario. Credit cycling generally refers to the practice of repeatedly paying down a balance to free up credit for additional use but does not necessarily involve exhausting credit limits through multiple merchants. Cardholder strategy typically pertains to planned financial management regarding credit cards and does not imply fraudulent behavior. Limit misuse suggests inappropriate use of credit limits but lacks the specific connotation of fraudulent intent inherent in bust-out card fraud. Thus, bust-out card fraud is the most accurate descriptor of the scenario.