limit
LIM-it
/ˈlɪmɪt/
The maximum amount of money a lender allows a borrower to spend on a single credit account.
Exceeding this cap can result in over-limit fees, declined transactions, or damage to your credit score.
The story behind the word. From the Latin 'limitem' (nominative 'limes'), meaning 'a boundary, limit, or path between fields'. It evolved to mean any boundary or restriction, including the maximum boundary of your credit line.
Word relationships
- cap: Cap is an informal or regulatory term for a maximum ceiling, while limit is the standard term used on credit statements.
- floor: A floor is the minimum level allowed, whereas a limit is the maximum.
Commonly confused with
- balance: The limit is the maximum you can borrow; the balance is the amount you currently owe.
Word family
- limitation (noun): A restriction or drawback.
- limited (adjective): Restricted in size, amount, or extent.
Collocations
- credit limit
- limit increase
- spending limit
Example sentences
- "She requested an increase on her credit limit to lower her utilization ratio." Credit card management
Memory hook
Think of a speed limit. Going over the credit limit, like going over the speed limit, results in penalties. The boundary line of your spending.
When not to use
Do not confuse with 'balance', which is the amount you have actually spent, not the maximum you are allowed to spend.
Fun facts
- Some exclusive credit cards, like the American Express Centurion Card (the 'Black Card'), have no pre-set spending limit.
Related words
Explore more words
overspend, overweight, finite, overdraft, credit, overconsumption
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