Credit Card Limit

Credit card limit refers to the maximum amount of credit a card issuer — bank or financial institution — extends to a cardholder, representing the total outstanding balance (including purchases, cash advances, and fees) that can be maintained on the credit card at any point in time. The credit limit is determined at account opening based on the applicant's income, credit score (CIBIL score), existing debt obligations, repayment history, and the bank's internal credit underwriting policies. In India, credit limits for salaried employees typically range from two to five times the monthly net salary, while self-employed individuals' limits are determined by income tax return filings and business turnover. The credit utilisation ratio — the percentage of the available credit limit being used — is a significant factor in CIBIL score calculation. Financial experts recommend maintaining utilisation below 30% of the total credit limit to preserve a healthy credit score — high utilisation signals credit stress and reduces creditworthiness. For Indian investors, understanding credit card limits is relevant to financial planning because high credit card utilisation and revolving balances at interest rates of 36% to 48% per annum represent the most expensive form of consumer borrowing — significantly eroding the investable surplus that could otherwise be deployed into equity, debt, or mutual fund investments through Ventura's platform.