Definition of «credit limit»

The term "credit limit" refers to the maximum amount of credit that a lender is willing to extend to a borrower. It represents an upper boundary on how much money can be borrowed against the line of credit, and serves as a safeguard for both the lender and the borrower. The credit limit is usually determined based on factors such as the borrower's income, employment status, credit history, and other relevant financial information. Once the credit limit has been reached, the borrower cannot borrow any more money until they have paid down their balance or received an increase in their credit limit.

Sentences with «credit limit»

  • I'm not sure why you would want to get two new cards, unless the balances are so big you can't qualify for that kind of credit limit on one card. (foxbusiness.com)
  • To boost your score, you can ask for credit limit increases on the cards you keep (your card issuer may not grant your request). (creditcards.com)
  • Taking out multiple new credit card accounts at once or getting a higher credit limit on more than one card at the same time can also hurt your credit score. (supermoney.com)
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