Revolving Credit
Definition
Credit you can use repeatedly as you pay it off. Credit cards are revolving — you can charge, pay, then charge again using the same credit line. Opposite of installment credit (car loans, mortgages) that you pay down to zero.
Why It Matters
Revolving credit is useful for flexibility but dangerous for overspending. It's easy to keep a balance and pay high interest. Credit utilization (how much you're using) heavily impacts credit scores.
Example
Credit card $10,000 limit. Month 1: charge $3,000, pay $2,000, owe $1,000. Month 2: charge $2,000, owe $3,000. Month 3: charge $4,000, owe $7,000. You can keep revolving as long as you don't exceed $10,000 limit.
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Pulsafi definitions are sourced from primary regulatory and industry references. See our methodology and data sources.