When the order is activated, the customers credit will be checked in two ways: is the sum of open invoices greater than the credit limit on the partner card, and are any invoices overdue by more days than allowed for this in System settings. The user will get a warning before the order is activated but will not be prevented from continuing with the activation.
There is also a setting in System settings that decides if the open value of sales orders should be added to the open value of invoices when evaluating the credit limit. This would normally be used in a make-to-order enviroment where the company would not like to start manufacturing work where a customer is overdue on invoice payment. If standard goods are being sold then it may be beneficial to enter sales orders but not ship them until invoices are paid.