Your credit limit is the maximum amount you can borrow on a credit card or line of credit. If your credit card has a $10,000 limit, you can spend up to $10,000. Go over that, and the transaction gets declined (or you face over-limit fees).
Banks set your credit limit based on your income, credit score, existing debts, and repayment history. A person earning $100,000 with an 800 credit score might get a $30,000 limit, while someone earning $40,000 with a 650 score might get $5,000.
A key tip: try to use only 30% or less of your credit limit (called credit utilization). Using $3,000 of a $10,000 limit (30%) looks great on your credit report. Maxing out your card signals financial stress and can drop your credit score by 50-100 points.