What is revolving credit?

There are many different product names and different features within the revolving credit product set, but the following are a list of characteristics which are common to most revolving credit facilities.

These are the characteristics of revolving credit loans

• Revolving credit is a transactional account.
• The borrower may use or withdraw funds up to a pre-approved credit limit.
• The amount of available credit decreases and increases as funds are borrowed and then repaid.
• The credit may be used repeatedly.
• The borrower makes payments based only their loan limit and pays interest only on the amount they've actually used or withdrawn.
• The borrower may repay the loan over time (subject to any minimum payment requirement), or in full at any time.
• Some revolving credit loans charge fees, and some do not.  
• Some revolving credit products have reducing limits which amortise (reduce) like a table loan.

Read about how to manage revolving credit effectively.