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 ?
So he was hit with a pounds 15 late-payment fee on top of the pounds 15 fee for breaking the credit limit.
In addition, the maximum revolving credit limit was increased from $135 million to $145 million through the facility's October 1996 maturity.
But a spokesman for the UK payments association Apacs said its members never raised the credit limits of borrowers with financial problems.
The company has paid the bank sufficient funds to bring it within its credit limit.
ASIC alleges that in fact, cardholders could still activate their credit cards or obtain credit limit increases without giving consent to receive unsolicited offers.
With the allocations, CapitaLand and the banks can enter into definitive deals to exploit the credit limit, if necessary, which is subject to mutually agreed terms and conditions.
The credit limit for Internet Now and MyFi customers is set at 5,000 AMD and at 10,000 AMD for Flybox customers.
Some experts recommend keeping your balances at 50 percent of your credit limit or less.
Nearly one in five (17 per cent) of those earning below the average national salary were given a credit limit higher than they requested.
Nevertheless, the Supreme Court quite properly sided with the Comptroller of the Currency, a federal regulatory agency that defined interest as fees ``connected with credit extension or availability,'' including late fees, annual fees, cash advance fees and charges for going over a credit limit.
The amended facility provides for the expansion of SAAN's revolving line of credit limit from CDN $20 million to CDN $27.

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