What is a credit limit?
Credit limit: A credit limit is the most you can borrow on a credit card or line of credit at one time. The issuer sets it and can raise or lower it later.
Issuers set a limit based on factors such as your credit history, income and existing debts. They may review it over time and change it, and you can usually ask for an increase.
Your limit is part of how credit utilization is measured: your balance divided by your available credit. Purchases, fees and interest all count toward the limit, and going over it can lead to declined transactions or fees, depending on the card.
When you compare offers
When you compare cards, the credit limit is usually set only after the issuer reviews your application, so focus on the APR, fees and terms you can see up front.
Related guides
- Choosing a Credit Card by Your Credit Score Range
How your credit score range can point you toward secured, rewards or balance-transfer credit cards, and which fees to check before applying.
- How Your Credit Score Can Affect the Offers You See
Why the offers you see through a marketplace may vary with your credit score, and how prequalification tools try to show relevant options.
This glossary is for general educational purposes and isn't financial, legal or insurance advice. Lendara is not a lender and does not make credit decisions. Lendara is a free online marketplace that connects you with participating lenders and providers, who set their own eligibility rules, rates, fees and terms. Lendara may receive compensation from partners, which may affect which offers appear and their order.