Revolving Credit

Importance: 0.57

Is a company: no

Is a proper noun: no

Synonyms

  • revolving line of credit
  • revolver

Alternate Spellings

  • Revolving Line of Credit

Definition of Revolving Credit

  1. A type of credit line that does not have a specified repayment schedule, but may require a minimum payment to cover interest and contribute to paying off the principal. This is typical for credit card loans, chequing account cash reserves, or overdraft accounts that have pre-approved lines of credit.

Related Terms and Acronyms

  • Line of Credit (LOC) Bank,
    • A commitment by a financial institution to lend up to a specified maximum amount to a customer during a specified period of time.
  • Adjusted Balance Bank,
    • A method used by some card issuers in which they subtract all payments made during the month, then add the finance charges.
  • Credit Insurance Definition,
    • A policy that pays off the card debt should the borrower lose his job, die or become disabled. The structure of protection for a revolving credit card debt is calculated each month to cover only the debt that existed at the last billing cycle.
    • Insurance that covers borrowers and/or lenders if one is unable to repay debts.
  • Credit History Bank,
    • A record of an individual's or company's past borrowing patterns and whether or not debts were repaid on time.
  • Credit Card (CC) Bank, Very Important,
    • A plastic card with a coded magnetic stripe that, when signed, entitles its bearer to a revolving line of credit, with a credit limit and interest rate determined by the borrower's income and credit report.
    A payment card that gives customers access to a revolving line of credit.
  • Credit Report (CR) Bank, Very Important,
    • A report on a loan applicant's willingness and ability to make payments in a timely manner in the past. This report is provided to the bank by an outside agency.
    A report that outlines the credit worthiness of an individual or entity.
  • Revolving Line of Credit (RLOC) Bank,
    • An agreement to lend a specific amount to a borrower, and to allow that amount to be borrowed again once it has been repaid. Most credit cards offer revolving credit.
  • Credit Bank,
    • Money that a lender gives to a borrower on condition of repayment over a certain period.
  • Revolver Bank,
    • A term credit card issuers use for card holders who roll over part of the bill to the next month, instead of paying off the balance in full each month. About seven out of 10 cardholders revolve the debt.
  • Interest Only Payments Bank,
    • A payment plan where only the interest is paid off.
  • Minimum Payment Bank,
    • The minimum amount a cardholder must pay to keep the account from defaulting. Some card issuers set high minimums if they are uncertain of the cardholder's ability to pay. Most card issuers require a minimum payment of three to five percent of the outstanding balance.
  • Credit Rating (CR) Bank, Very Important,
    • A judgement of a person's ability to repay debts. The rating is often based on a person's current and projected income and past debt payment history. Also called a credit score.
    A metric to measure the credit worthiness of a debtor.
  • Cash Advance Fee Bank,
    • A fee charged by the bank for using credit cards to withdraw money generally from an ATM or banking machine. This fee can be a flat fee per transaction or a percentage of the amount being advanced. For example, the fee may be set as: "2% / $10." This means the cash advance fee will be the greater of 2% of the cash advance amount or $10. Banks often limit the fee to a certain dollar amount.
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