What is a credit limit?

A credit limit is the maximum amount of credit a person can borrow from a credit card company. In Oregon, it is illegal for a credit card company to loan a person more than 50% of their current income in a credit limit. This means that the total of all credit limits, across all credit cards, on a person’s account cannot be more than 50% of their income. Additionally, no one credit card can have a limit that is more than 50% of a person’s income. In Oregon, credit card companies are required to inform customers of their credit limit when the account is opened. It is also important to note that while a person’s credit limit is the maximum amount they are able to borrow, it does not mean that they should use all of it. This is because borrowing more than what is necessary and making late payments can lead to a lower credit score. Oregon also enforces a minimum payment amount. This means that if the balance on a credit card is above the credit limit, the customer is still required to pay the minimum payment, but they must pay the amount over the credit limit as well. In summary, a credit limit is a maximum amount of credit a person can borrow from a credit card company, set by law in Oregon. It is important to stay within the credit limit and make payments on time in order to maintain a good credit score.

Related FAQs

What is a chargeback?
What should I do if I spot an error on my credit report?
How do I use a credit card responsibly?
What is the Credit Card Accountability Responsibility and Disclosure Act of 2009?
What is a Fair Credit Billing Act?
How do credit card companies make money?
Can I use a credit card to make purchases abroad?
What is the difference between a credit card and a charge card?
What is the maximum credit limit I can have?
What are the best ways to build credit?

What is a credit limit?

Related FAQs

Related Blog Posts