I am trying to understand what a credit limit means in banking and credit cards. Is it the maximum amount you can borrow or spend, and how is it decided by banks? Can someone explain in simple terms with an example so I can get a clear idea?
A credit limit is the maximum you can spend on a credit card, set by banks based on income, credit history, and repayment habits. Example: ₹50,000 limit = you can spend up to ₹50,000.
A credit limit is the maximum amount of money a lender or credit card issuer allows you to borrow or spend on credit. It’s set based on factors like your credit history, income, and repayment ability. Staying within your credit limit and managing it responsibly helps maintain a good credit score and financial health.
A credit limit is the maximum amount of credit a lender is willing to extend to a borrower on a credit card or line of credit. It represents the highest balance you can carry on your account without exceeding the terms of your credit agreement.
A credit limit is the maximum amount a lender allows you to borrow on a credit card or credit account. It’s based on your credit history, income, and financial profile, helping control spending and risk.
