Credit limit意思

"Credit limit" is a term commonly used in the context of credit cards and loans. It refers to the maximum amount of money that a person or organization is allowed to borrow or spend before they reach their limit and are no longer able to make purchases on credit.

For example, if you have a credit card with a credit limit of $1,000, you can use the card to make purchases up to that amount. Once you reach $1,000 in charges, you will not be able to make any more purchases on that card until you pay some of the balance down.

Credit limits can vary widely depending on the individual's credit history, income, and other factors that lenders consider when assessing their creditworthiness. Higher credit limits can be beneficial because they allow for greater flexibility in managing finances and can sometimes result in lower interest rates. However, it's important to use credit responsibly and not to spend more than what one can afford to repay.