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Revolving Credit Limit
Explanation:
A credit card user can charge up to this amount and is only required to pay back a fraction of it each month. Anything not paid back becomes part of a user's balance and incurs interest.
Spending up or above your revolving credit limit raises your credit utilization and can hurt your credit score.
Our Thoughts:
It is best not to allow your spending to approach your revolving credit limit because having unused credit is important in the eyes of lenders. Some No Preset Spending Limit (NPSL) credit cards give you the ability to exceed your revolving credit limit as long as you pay back the excess in full each month. This should be avoided because in a lot of cases it leads to 100% credit utilization.