Credit limit (kreditgrænse)
Also known as credit maximum, credit line, credit ceiling, spending limit, kreditmaksimum, kreditmax, kreditramme, kreditlinje, forbrugsgrænse, kreditbeløb
The credit limit is the maximum amount a customer may owe you at any one time — the ceiling on your exposure.
In practice
The credit limit is the mechanism that stops a single customer from bringing you down. It has to be set, it has to be enforced in the system, and it has to be adjusted when the customer’s circumstances change.
The central question is not “how much do they want to buy for”, but “how much can we afford to lose”. Those are two entirely different numbers.
Where it commonly goes wrong
- The limit exists in the system, but it can be overridden without approval. Then it is not a limit.
- It is only ever adjusted upwards. A customer with deteriorating key figures should have the limit lowered, not simply left where it is.