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.