credit limit

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Credit Limit

The maximum amount of money one is allowed to borrow. A bank or another financial services company may extend a credit line to a client, which is essentially approval for a loan or series of loans to be given on demand from the borrower. The borrower is under no obligation to actually take out a loan at any particular time. The maximum amount for which a particular borrower is approved is known as the credit limit. Banks and financial services company do not extend loans past the credit limit. For example, one may have a credit card with a credit limit of $2,000; if one attempts to put $2,100 on the card, the bank will decline payment. A good credit report and a regular history of loan payments may result in the credit limit being raised. See also: Facility.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Credit limit.

A credit limit, also known as a credit line, is the maximum amount of money you can borrow under a revolving credit agreement.

For instance, if you have a credit card with a credit limit of $3,000, and you charge $1,000, you can spend $2,000 more before you reach your credit limit. And if you repay the $1,000 before the end of the month without making additional purchases, your credit limit is back up to $3,000 again.

Most credit issuers charge additional fees or penalties if you exceed your credit limit.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

credit limit

The maximum loan amount a person may receive on a particular instrument or from a particular lender. A revolving line of credit might have a credit limit of $50,000.Banks have limits on the amount of credit they can extend to single borrowers, based on the size of the bank, and limits on the credit they can extend to officers and directors.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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In the present paper, we likewise draw on the CCP data but unlike our previous research examine the determinants of individual-level bankcard credit limits as opposed to aggregate-level credit balances.
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He testified that it was ordinary in the industry for there to be credit limits, net 60-day payment terms, and oral contracts, without relying on any supporting data or reports.