credit limit

Meaning

A credit limit is the maximum amount of money a lender, bank, or supplier allows a borrower to spend or borrow on a single account. Once this limit is reached, no further transactions can be made on credit until a payment is made to reduce the outstanding balance.

Examples

• We can't place another order because we have already exceeded our credit limit with this supplier.

  We can't place another order because we have already exceeded our credit limit with this supplier.

• The bank agreed to increase our corporate credit limit to fifty thousand dollars.

  The bank agreed to increase our corporate credit limit to fifty thousand dollars.

• Please check if we have enough room on our credit limit to cover the software licenses.

  Please check if we have enough room on our credit limit to cover the software licenses.

• They offered us a generous credit limit to encourage us to buy more inventory from them.

  They offered us a generous credit limit to encourage us to buy more inventory from them.

• To avoid overspending, our finance department set a strict credit limit on all employee cards.

  To avoid overspending, our finance department set a strict credit limit on all employee cards.

Common Mistakes

• ✗ We reached our credit limitation on the company card.

  ✓ We reached our credit limit on the company card.

  Use 'credit limit' as the standard financial term. 'Credit limitation' sounds unnatural and refers to a general restriction rather than a maximum balance.

• ✗ The bank expanded our credit limit yesterday.

  ✓ The bank increased our credit limit yesterday.

  While 'expanded' is understandable, native speakers almost always 'increase' or 'raise' a credit limit.

Related Expressions

Practice

• The supplier refused to ship the goods because our outstanding balance went over our ___.

  💡 The maximum amount of credit allowed on an account.

  Show answer

  credit limit

• We requested a temporary increase in our ___ to cover the peak season marketing expenses.

  💡 The spending cap on our corporate credit card.

  Show answer

  credit limit