Think about credit cards before online processing - the old paper machines that imprinted your card onto carbon paper.
The merchant was guaranteed payment. You, on the other hand, were indebted to the bank. The concept of a “credit limit” was the line over which the bank insisted you not step, lest you incur fees galore.
The merchant was guaranteed payment. You, on the other hand, were indebted to the bank. The concept of a “credit limit” was the line over which the bank insisted you not step, lest you incur fees galore.