A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Credit LimitThe maximum amount a lender lets you borrow on a credit card or line of credit before charges get declined.
- Credit UtilizationThe share of your available credit that you are currently using, calculated by dividing your balances by your credit limits.
- Credit CardA card that lets you borrow from a lender for purchases up to a limit, requiring repayment and charging interest on unpaid balances.
- Revolving CreditA type of borrowing where you can repeatedly use and repay up to a limit, like a credit card, without a fixed payoff date.
More in Credit & Debt
Plain-English education — not personalized legal, tax, or investment advice.