What Is A Credit Limit?
When you open a new credit card account, that account has a credit limit. This limit is the total balance you can carry on the card at any given time. Think of your credit limit as the maximum amount of money you can use.
For example, if you have a $100 credit limit, the most you can charge on the card is $100. However, if you have a $30 balance on the card you haven’t yet paid, you only have $70 left you could put on the card to reach the maximum $100 limit.
If you try to buy something that would cause you to exceed your credit limit, that transaction will be denied.
For more on how credit limits work, read the blog post “The Complete Guide to Credit Limits” here.