Credit Limit
✓ Last verified 14 Sep 2026
The short version
Credit limit is the maximum amount a lender allows you to borrow on a credit card at any one time - set based on your income, credit history, and existing obligations, and a key input into your credit utilization ratio.
A card issuer sets your credit limit based on factors like income, existing debt obligations, and credit history - a higher limit generally reflects a stronger credit profile, though it's a ceiling on borrowing, not a target to use up. A higher limit, used responsibly, can actually help your credit utilization ratio (since the same spending represents a smaller percentage of a larger limit) - see our credit utilization ratio glossary entry for why this matters for your score.
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