Revolving credit
Revolving credit can be any of the following:
- A credit agreement that allows consumers to pay all or part of the outstanding balance on a loan or credit card. As credit is paid off, it becomes available again to use for another purchase or cash advance.
- A line of credit that may be used repeatedly up to a specified total, with periodic full or partial repayment.
- A type of credit which allows a borrower to withdraw funds up to a preapproved credit limit. Credit cards are most often the type of revolving credit borrowers use. Borrowers make payments based only on the amount they've actually charged to their revolving account/credit card, plus interest.
- Typical of a line of credit or credit card in which the amount of available credit increases and decreases as funds are borrowed and then repaid.
- A consumer credit line that can be used up to a certain limit or paid down at any time.
A credit card is a typical instrument which offers revolving credit.
