What Is Revolving Credit?
Revolving credit refers to a type of credit account that allows the borrower to repeatedly borrow up to a certain limit. Making payments reduces the balance owed and frees up credit, which can be used again. Credit cards, personal lines of credit, and home equity lines of credit (HELOCs) are all types of revolving credit.
Key Takeaways
- Revolving credit gives a borrower access to credit up to a specific credit limit.
- Borrowers can repeatedly charge and pay down debt with revolving credit, but they may be charged fees or interest.
- Credit cards, lines of credit, and home equity lines of credit are all examples of revolving credit.
Investopedia / Lara Antal
How Does Revolving Credit Work?
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