Method and system for credit management in a networking system

A method for credit management in a network system is provided. The method comprises receiving an incoming frame at a receive port of a network device; determining a frame length of the incoming frame; based on the frame length, determining whether to store the frame in a first memory storage space or a second memory storage space, wherein the first memory storage space includes a plurality of slots and each of the plurality of slots can store only one frame regardless of frame size; and the second memory storage space includes a plurality of slots and each of the plurality of slots can store more than one frame; and if the incoming frame is stored in the second memory storage space, transmitting a signal immediately to another port indicating that credit is available.