The paper presents a performance analysis of a rate-based congestion control mechanism. The switching capacity of the buffer is finite to reflect real conditions. Using a differential equation approach, we get the closed-form equations of cell loss probability and utilization. Numerical results are given to show that our analysis is correct. In rate-based control, the important issue is how to determine congestion occurrence and congestion relief. The most common method is to set two thresholds of queue length, a high threshold and a low threshold. The values of these two thresholds seriously influence the system performance. Hence, we present the concept of best area to determine how to set the high and low thresholds to guarantee good performance, i.e., cell loss probability is zero and utilization is one, if it is possible. When good performance is not achieved due to too many connections or too large propagation delay, some rules are also given to prevent unnecessary cell-loss and under-utilization.