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What does Credit Limit mean?

Credit Limit is the amount of money an issuer of credit has extended to you. It’s actually a loan that you are able to borrow against it.

“available credit.” This amount is equal to your credit limit minus the new balance on that credit card.

The maximum credit limit an issuer is willing to extend is based on a number of factors including the number of years you’ve been a customer and your history of credit card payments. If you prove to be a good credit risk, you’ll notice that occasionally your credit limit will be increased. As long as you don’t exceed your credit limit , you’ll be allowed to continually make charges (or take cash advances) against that credit limit.

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