A credit limit is the maximum amount of money that a bank or a credit card company allows their cardholder to borrow on a credit card. If the cardholder exceeds his/her credit limit, he/she gets charged an over the limit fee or default rate. That’s one of the reasons why it is advised not to keep close to the credit limit.
Please note that it is always up to your credit card issuer to decide on the credit limit. Your credit history, creditworthiness and employment stability are crucial risk factors a credit card issuer considers when determining the credit limit on your new credit card.
