Revolving Credit

A type of credit facility with a pre-set limit that you can draw from repeatedly as you repay it, such as a credit card or an overdraft. Unlike an instalment loan with a fixed repayment schedule, revolving credit is flexible — you borrow what you need, repay it, and borrow again up to your limit. Interest is typically charged only on the outstanding balance.

A £2,000 credit card limit is revolving credit. You spend £500, repay it, and the full £2,000 is available again.

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