Available Credit
GeneralGlossary term
Definition
The amount you can still charge on a credit card, calculated as credit limit minus current balance and pending transactions. Using all available credit hurts credit utilization ratio.
Related terms
- Credit LimitThe maximum amount of money a lender allows you to borrow on a credit card or line of credit. Your credit limit is determined by factors such as your income, credit history, and existing debt. Spending close to or above your credit limit can hurt your credit score and may result in over-limit fees.
- Credit UtilizationThe percentage of your available credit that you are currently using, calculated by dividing your total credit card balances by your total credit limits. It is one of the most important factors in your credit score, and experts generally recommend keeping it below 30%. Lower credit utilization signals to lenders that you manage credit responsibly and are not overextended.
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