Credit Limit

A credit limit is the maximum amount of money a lender allows you to borrow on a credit card or line of credit. It’s set based on factors like your income, credit history, and financial situation. This limit helps both you and the lender manage spending and risk. You can make purchases up to that limit, but exceeding it usually results in a declined transaction or over-limit fees. Keeping your balance well below your credit limit can positively impact your credit score and overall financial health.