A credit limit is the maximum amount a borrower can spend or owe on a credit facility, such as a business credit card or a line of credit. Spending up to the limit is allowed, while going over it is usually declined or carries a fee.
General information, not financial, legal, or tax advice. Verify current terms and eligibility with the provider before applying.
How a credit limit works
A credit limit is the maximum balance a provider allows a business to owe on a credit facility at any one time. On a business credit card, for example, the business can make purchases until the outstanding balance reaches the limit, and as it repays what it owes the available credit is restored. Transactions that would take the balance above the limit are usually declined, and some providers allow them but charge an over limit fee. The limit applies to the amount owed, not to how many transactions are made. This information is current as of 6 March 2026.
What affects a credit limit
A provider sets a credit limit when the facility is approved, based on factors such as the business revenue and finances, its credit history, and how long it has traded. The limit is not necessarily fixed: a provider may raise it for a business that uses the facility well and repays on time, or lower it if the risk appears to increase. A business can often request a change, which the provider assesses. The exact criteria differ between providers.
Why it matters to a business
The credit limit sets how much spending power a facility gives a business, so it affects whether the facility can cover expenses or a short term gap. Using a large share of the limit can also affect how lenders view the business, and going over the limit can lead to declined payments or fees. Keeping spending within the limit and understanding how the provider treats it helps avoid surprises. Confirm the limit, any over limit charges, and the review terms with the provider.
Frequently asked questions
What is a credit limit?
What happens if you go over your credit limit?
How is a credit limit set?
Can a credit limit change?
Definitions, fees, features, and eligibility change and vary by region. This page was last reviewed on 6 March 2026. Confirm current terms with the provider before applying.