A credit limit is the maximum amount of credit That a financial institution or other lender will extend to a debtor for a Particular line of credit (sometimes called Expired on credit line, line of credit, gold TRADELINE). For example, it ‘s the one that’ s the credit card company.
This limitation is based on a variety of factors ranging from an individual’s ability to make interest payments, an organization’s cashflow or ability to repay the credit card debt and is an obligation of the consumer to pay just like all other parts of the balance.
A line of credit that has reached or exceeded its limit is said to be maxed out . While the line of credit is maxed out, it can not be used for any further activity unless the consumer pays off at least some of the debt to enable it to fall below the limit, the creditor Or more additional purchases with the charging of an over-the-limit fee.