Terms and Conditions
What is a spending/credit limit?
The Spending or Credit Limit is the maximum amount of charges you can make on your card. Credit card companies generally use this rule of thumb to determine the limit on your credit card debt: debt should be no more than 20 percent of your total income. You can think of your credit limit as the “ceiling” or top amount you are allowed to borrow at one time with your credit card.
EXAMPLE:
If your yearly income before taxes is $50,000, then your credit limit would be $10,000. Your credit limit is determined when the account is opened, but can be increased over time. Contact your credit card company to find out more about how to get a credit limit increase.
See also:
What is an “over the limit” fee?
What is a credit rating?
What is a minimum payment?
Last update: 2006-09-25 15:54
Author: BKO
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