A credit limit is set by the lender and is based on factors such as your credit history, income, and other financial information. The higher your credit limit, the more money you can borrow. However, it is important to remember that having a higher credit limit does not mean that you should use all of it.
When you use your credit limit, it is reported to the credit bureaus and affects your credit score. If you use more than 30% of your available credit, it can have a negative impact on your score. This is because the credit bureaus see this as a sign of financial instability and it can lower your score.
It is important to remember that your credit limit is not a reflection of how much money you can spend. It is simply the maximum amount of money that a lender is willing to lend you. moreover, It is important to use your credit responsibly and not exceed your credit limit.
This will help you maintain a good credit score and will help you when it comes time to apply for a loan or line of credit.