Credit limit
The most you can spend on a credit card, set by the bank from your income and credit score.
A credit limit is the most you can spend on a credit card, set by the bank mainly from your income and credit score. Your spending plus any unpaid dues cannot cross it. The limit is a ceiling the bank is willing to lend, not an amount you are meant to spend: using a large share of it, called high credit utilisation, can weigh on your score.
Questions people ask
What is a credit limit on a credit card?
It is the most you can spend on the card, set by the bank. Your spending plus any unpaid dues cannot cross this amount. The bank decides it mainly from your income and your credit score.
How is a credit limit decided?
Mostly from your income, your credit score, and how much you already owe elsewhere. A higher income and a cleaner record usually mean a higher limit.
Should I use my full credit limit?
Using a large share of your limit every month, called high credit utilisation, is widely seen as a negative signal and can weigh on your score. Keeping your usage well below the limit is the safer habit.
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