What is Revolving Credit and Is It Good To Use?

There’s a good chance you already have access to revolving credit and use it frequently. Almost 70% of Americans have at least one credit card. Many people have multiple revolving credit accounts or “lines” of credit.

Credit cards (including store credit cards), home equity lines of credit (HELOC’s), and deposit accounts with overdraft protection are examples of revolving credit accounts.

Is revolving credit good to use? Read on to learn more about revolving credit, how it is different than other loans, and why it may — or may not be a wise decision for you to use it.

How Does Revolving Credit Work?

Revolving credit is flexible financing where a lender extends a set amount of credit. You decide the amount you want to use and when you want to use it.

At the end of the month, you pay the money back or pay interest on any balance remaining (unless you are in 0% interest promotional period).

There are no fixed payments on revolving credit lines. The credit available and your minimum payment fluctuate based on use and repayments to the credit line.

The full balance of your account can be paid early without penalty. You can also use your available credit balance over again until your revolving…