The credit limit in Amazon Pay Later represents the maximum spending power allocated to you, determining the total amount you can borrow for purchases on Amazon.in. It's the upper ceiling of your credit line, allowing you to buy products now and pay for them in easy installments later.
Amazon Pay Later is a digital payment facility offered by Amazon in partnership with lending partners, providing instant credit for your shopping needs. Your assigned credit limit is based on your eligibility, creditworthiness, and other factors assessed by the lending partner.
Understanding Your Amazon Pay Later Credit Limit
Your Credit Limit (referred to as 'Available Regulatory Limit' in some Amazon contexts) is the principal amount sanctioned to you. This is the maximum value of transactions you can make using Amazon Pay Later. However, the actual amount you can use at any given moment can vary based on your outstanding dues and recent transactions.
To understand this better, Amazon Pay Later details your available credit using two specific terms:
- Usable Limit: This is the immediate amount of credit you have available for new purchases. It is calculated by deducting any outstanding dues and the value of any pending or current transactions from your total credit limit. This is what you can currently spend.
- Total Available Limit: This figure reflects your Usable Limit plus any repayments you have made but which might still be pending processing by the lending partner. It gives you a broader picture of your potential spending power once all recent repayments are fully settled.
How Your Limit Changes
Your Amazon Pay Later credit limit is dynamic. It decreases with every purchase you make and increases as you make repayments towards your outstanding balance. Prompt repayments can also positively influence your credit score and potentially lead to an increase in your overall credit limit over time, though this is at the discretion of the lending partner.
Example: Understanding Credit Limit Components
Let's illustrate with an example to clarify the 'Usable Limit' and 'Total Available Limit' based on your overall credit limit:
| Component | Amount (Rs.) | Description |
|---|---|---|
| Available Regulatory Limit (T) | 60,000 | This is your overall, sanctioned credit limit for Amazon Pay Later. |
| Current Transaction (C) | 10,000 | The value of a recent purchase or a transaction currently being considered. |
| Repayment Transaction (R) | 5,000 | An amount you have recently repaid towards your outstanding balance. |
| Usable Limit (T - (Outstanding Dues + C)) | 25,000 | This is the amount immediately available for new purchases. It's calculated after deducting any previously utilized amounts (outstanding dues) and the current transaction value from your total credit limit. |
| Total Available Limit (Usable Limit + R) | 30,000 | This reflects your usable limit plus the amount of any recent repayments that are still being processed. Once the repayment is fully settled, this amount will typically merge with and increase your usable limit. |
In this example, while your total credit line is Rs. 60,000, your immediate spending capacity (Usable Limit) is Rs. 25,000. Once your Rs. 5,000 repayment is fully processed, your Usable Limit would increase to Rs. 30,000, matching your Total Available Limit from this calculation.
For more detailed information on managing your Amazon Pay Later account, you can visit the How to use Amazon Pay Later page on Amazon India's customer service.
