Investopedia

Continue to Site »

Credit Limit

Filed Under »
Dictionary Says

Definition of 'Credit Limit'

The amount of credit that a financial institution extends to a client. Credit limit also refers to the maximum amount a credit card company will allow someone to borrow on a single card. Credit limits are usually determined based on information contained in the application of the person seeking credit, or that person's credit rating.
Investopedia Says

Investopedia explains 'Credit Limit'

A borrower's credit limit may be raised after he or she exhibits timely and full repayments. However, having a high credit limit and multiple lines of credit may hurt a person's overall credit rating. In these cases, new potential lenders can see that the applicant has access to a large amount of debt, which may lower the chances that this person will be able to repay his or her debts in the future. As a result, new potential lenders might be less likely to offer an additional source of debt.

Articles Of Interest

  1.

    What's On A Consumer Credit Report?

    A look at the various components and considerations that go into one's credit report and credit score.

  2. Getting Your Kids Their First Credit Card

    Putting some plastic in your children's wallets may actually help them - if you do it right.

  3. Take Control Of Your Credit Cards

    The plastic in your wallet doesn't have to hurt your finances. Learn how to manage it responsibly.

  4. The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.

  5. Credit, Debit And Charge: Sizing Up The Cards In Your Wallet

    Not all plastic is equal! Learn the difference between the three kinds, and how each can affect your finances.

  6. Should You Pay In Cash?

    Avoiding all forms of plastic payment can do wonders for your stress level and pocket book.

  7. Check Your Credit Report

    Make sure there are no errors holding you back from obtaining a loan.

  8. Understanding Credit Card Interest

    Paying these rates can impact your disposable income and your investment returns.

  9. Digging Out Of Personal Debt

    Find out why good intentions can put consumers in an even bigger hole than before.

  10. 7 Unconventional Ways Businesses Can Borrow Money

    Find out how your business can get the money it needs - even when the bank says "no".
comments powered by Disqus
Marketplace
Hot Definitions

  1. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  2. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  3. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  4. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  5. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  6. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Trading Center