New Delhi, Sept. 8 -- A credit card, simply put, is a financial instrument issued by NBFCs or banks. It permits users to borrow money up to a sanctioned limit for purchases or cash withdrawals. It requires regular repayments within a stipulated time, often with interest if unpaid.

The stipulations that companies put on an individual's credit card are known as limits. Understanding these terms is vital for aspirational and current credit card users to ensure efficient usage of these modern credit tools.

In reality, credit limits are more than just spending thresholds. They shape users' financial health, impacting credit profiles, credit scores, borrowing potential, and even spending habits. Recognising their importance can lead to better...