credit limits

A credit limit is the maximum amount of money you are allowed to borrow or spend on a credit card or line of credit. It’s set by your lender based on factors like your income, credit history, and repayment ability. Staying within this limit helps you avoid extra fees, interest charges, and potential negative impacts on your credit score. It’s a cap designed to manage risk—for both you and the lender—ensuring you don’t borrow more than you can reasonably repay. Monitoring your spending relative to your credit limit promotes responsible financial management.