Revolving credit

Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit.

Typical characteristics

• The borrower may use or withdraw funds up to a pre-approved credit limit.
• The amount of available credit increases and decreases as funds are borrowed and then repaid.
• The credit may be used repeatedly.
• The borrower makes payments based only on the amount they've actually used or withdrawn, plus interest.
• The borrower may repay over time (subject to any minimum payment requirement), or in full at any time.

Examples

• Credit card
• Line of credit
• Some loans, such as some home equity loans

See also

• Installment credit