Your credit limit is the maximum amount you're allowed to spend on a credit card. It’s determined by your card issuer based on factors such as your credit score, income, and payment history. Going over this limit may result in declined transactions, fees, or even a negative mark on your credit report if unpaid. Understanding your credit limit is essential for budgeting and avoiding high utilization, which can hurt your credit score. Staying well below your limit also signals financial responsibility to lenders and improves your chances of credit line increases in the future.