Banking

Q&A: What are revolving credit accounts?

Revolving credit accounts are lines of credit in which the balance of the account can go up or down depending on the payments made and amount borrowed. These types of credit usually have a credit limit.

Examples:
Credit Cards
Retail Store Cards
Gas Station Cards
HELOC (Home Equity Line of Credit)

Real-life Application: Person A has a credit card with a limit of $3,000 and they currently have a balance of $500 on it. They use it to buy $100 of food, so the balance is now $600. Before the month ends, they pay it off so they don’t incur interest.

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