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.

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.

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.

References in periodicals archive ?
The company said this credit limit is secured by a directly enforceable guarantee granted by Turret Oy Ab and Holdix Oy Ab to Nordea Bank AB, Finnish Branch, amongst other things, as collateral for the liabilities of Digitalist Group and its subsidiaries.
That's the sneaky way credit limits are increased, despite users not asking for them.
4 million people across the UK - received a credit limit increase.
The reforms will substantially reduce the incidence of consumers being granted excessive credit limits and building up unsustainable debts across multiple credit cards.
In many cases, the credit professionals determine that a customer may qualify for a higher credit limit or improved terms.
An Indian resident based in Dubai, Anjana (name changed upon request), was fuming when she received a letter from a bank on May 8 informing her that they had increased the credit limit on her three cards - one main card, an internet card, and a supplementary card.
Later, rather than opening new HELOCs, she increased the credit limits on two of the fraudulent HELOCs to support her spending.
21567), they find that banks disproportionately passed through credit expansions to consumers whose spending was relatively unresponsive to changes in credit limits, rather than to those who were most likely to increase spending.
Lenders are duty bound to ask their customers whether they would like their credit limit to be extended rather than doing it automatically, but borrowers do not have to agree.
We believe that the UNB Platinum Credit Card is a genuine provider of benefit and value and also provides one of the highest credit limits in the market.
In this case, the credit limit is fixed on the basis of the 'billed value'.
In addition, foreign exchange risk insurance fees for SMEs will be temporarily reduced by 20 percent, and the credit limit for SMEs with export volumes of up to US$5 million will be expanded by 20 percentage points.