Kreditlimit

Kreditlimit, or credit limit in English, is the maximum amount of credit that a lender is willing to extend to a borrower at any given time. It is commonly used for products such as credit cards, lines of credit, and other revolving or open-ended credit facilities. The limit represents the ceiling for outstanding balances; the available credit equals the limit minus the current balance. In daily use, borrowers often refer to their available credit rather than the total debt.

The Kreditlimit is typically determined by the lender through a credit assessment. Key factors include the borrower’s credit history, income, employment stability, existing debt, and overall repayment capacity. Lenders may also consider collateral, guarantees, the type of credit product, and internal policy or regulatory requirements. For businesses, limits can depend on cash flow, historical payment performance, and financial covenants.

Management and implications are closely related to risk and cost. A higher limit can improve purchasing flexibility but may raise the risk of overspending and higher utilization, which can influence future terms or interest rates. Regularly approaching the limit may trigger automated reviews or changes to the credit terms. If the balance reaches or exceeds the limit, transactions may be declined or subject to over-limit fees, depending on the contract. Persistent overuse can lead to reduced limits or account termination.

Terminology varies slightly across German-speaking contexts. Kreditlimit is often used alongside terms like Kreditrahmen or Kreditlinie, where Kreditlimit emphasizes the cap while Kreditrahmen/Kreditlinie refers to the overall credit facility.