---
title: "Credit limit: definition | Rex glossary"
description: "The maximum outstanding balance a business lets a customer carry before new orders are held or reviewed."
canonical: https://www.rex.inc/glossary/credit-limit
---

# Credit limit

The maximum outstanding balance a business lets a customer carry before new orders are held or reviewed.

Credit limits are usually set from the customer's financial strength, payment history and expected order volume, then reviewed as those change.

A limit only works if it's checked when orders are placed and kept up to date. Customers who regularly exceed it need either a higher limit or closer attention.

## Related terms

- [Credit hold A block on new orders or shipments for a customer who's over their credit limit or seriously past due, until the balance is paid or the order is approved.](https://www.rex.inc/glossary/credit-hold)
- [Credit management Deciding which customers get credit, how much and on what terms, then monitoring that risk while they owe you money.](https://www.rex.inc/resources/glossary/what-is-credit-management)
- [Credit policy Written rules for granting credit: who qualifies, how limits and terms are set, who can approve exceptions and when accounts are escalated.](https://www.rex.inc/glossary/credit-policy)

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