A credit limit refers to the maximum amount you can charge to a credit card. Payments, fees, interest charges, cash advances and outstanding balances all count towards your credit limit.
Should you reach the credit limit on your card (aka 'maxing out' your credit card), you will no longer be able to use it to pay for your purchases. You may also be charged a penalty fee.
Generally, credit limits are determined at the time of application of your credit card. Credit limits are set at between 2 to 4 times your monthly income.
A card's credit limit is not set in stone. You may specify a credit limit during the application of your credit card, or you may request for it to be raised or lowered during use.