WordValecredit line
a maximum amount a lender agrees to make available
In more detail
1. (noun) an agreement with a bank or other lender to borrow money up to a certain amount when you need it
2. (noun) the amount of money that a bank agrees to lend you
Examples
- 1. The company opened a credit line to cover unexpected expenses.
- 2. My bank increased my credit line from $5,000 to $10,000.
How to use credit line
A credit line is a financial arrangement commonly used by both individuals and businesses. Unlike a loan where you receive a lump sum upfront, a credit line allows you to borrow money as needed up to an agreed maximum, paying interest only on what you actually use. The term is used in banking and finance contexts.
Common phrases
- establish a credit line
- open a credit line
- draw on a credit line
- increase a credit line
- credit line agreement
Synonyms
line of credit · credit facility · borrowing limit · credit allowance
A common mistake
Learners sometimes confuse credit line with credit limit (the maximum you can spend on a credit card), though they function similarly—a credit line is typically arranged with a lender for flexible borrowing, while credit limit refers specifically to cards.
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