Revolving Credit
Revolving credit is a type of loan that allows borrowers to access a line of credit and make purchases up to a certain limit. The borrower can then pay back the loan over time, with interest, and then access the line of credit again. This type of loan is often used for large purchases, such as a car or home, or for everyday expenses, such as groceries or bills. Revolving credit is a great way to manage finances, as it allows borrowers to access funds when needed and pay them back over time.
History of Revolving Credit
The concept of revolving credit has been around since the early 1900s. It was first used by department stores, who would offer customers a line of credit to purchase items. This allowed customers to purchase items without having to pay for them upfront. Over time, the concept of revolving credit spread to other industries, such as banks and credit card companies. Today, revolving credit is a popular way for individuals to manage their finances and make large purchases.
Comparison of Revolving Credit
| Type of Credit | Interest Rate | Payment Terms |
|---|---|---|
| Revolving Credit | Variable | Monthly payments |
| Installment Credit | Fixed | Fixed payments |
Summary
Revolving credit is a type of loan that allows borrowers to access a line of credit and make purchases up to a certain limit. The borrower can then pay back the loan over time, with interest, and then access the line of credit again. This type of loan is often used for large purchases, such as a car or home, or for everyday expenses, such as groceries or bills. For more information about revolving credit, you can visit websites such as Bankrate, Credit Karma, and NerdWallet.
See Also
- Installment Credit
- Credit Card
- Debt Consolidation
- Line of Credit
- Personal Loan
- Secured Loan
- Unsecured Loan
- Debt Management
- Credit Score
- Credit Report
