Your credit card limit is the maximum amount you’re permitted to rack up at any one time on a specific credit card. If you exceed it, you’ll likely wreck your credit — plus you risk getting hit with fees, a decreased credit limit or other penalties, according to Experian, one of the three leading credit reporting agencies.
In addition to avoiding penalties, you should pay attention to your credit limits because they help determine one of the most important factors in credit scoring: your utilization ratio. Your utilization ratio is the amount of credit you’ve used versus the amount available to you.
