Glossary · Financial Portfolio

What is a credit limit?

A credit limit is the maximum borrowing amount approved for a credit facility, subject to its terms. It is different from the amount currently owed.

Start Free All glossary

Plain English. Australian context.

Credit limit

Know what the term means, what it does not mean and where to go next.

Meaning & context

What it means for your records.

Plain-English information to help you organise your financial picture.

Financial Portfolio editorial team
Australian record-keeping context
Updated 7 October 2026

A simple example

A card with a A$10,000 limit and a A$2,000 balance has A$2,000 currently owing. A simple unused-limit calculation gives A$8,000, but pending transactions and account conditions may affect available credit.

What to keep in your records

Keep the limit, current balance, statement date and repayment due date separate. Do not list unused credit as savings or automatically use the full limit as the current debt.

A common mix-up

Available credit is permission to borrow, not money you own. For a net worth snapshot, use the amount owed rather than the facility’s maximum limit. Read ASIC Moneysmart’s explanation.

Does increasing a credit limit increase net worth?

No. An unused borrowing limit is not an asset. Borrowing more generally creates an additional debt that must be recorded.

Where can I check the meaning of credit limit?

Use the ASIC Moneysmart source alongside the relevant statement or product documents. The examples here explain the term; they do not recommend a financial product.

Start with what you have

Bring your financial life into focus.

You do not need every detail on day one. Start with the records that matter most, then build a clearer picture at your own pace.

View plans Talk to the team