Revolving Line of Credit

A revolving line of credit is a line of credit that is available for borrowers to pull from on a continuous basis, regardless of if the full existing balance owed has been paid off.

A credit card is a good example of revolving credit. Customers are able to continue using their credit card (until their limit is reached), and when they pay off the balance, the same funds remain available. Revolving lines of credit can be risky for the borrowers, however, as it requires a responsible person or party who can control their spending without spending more than they can afford.

Other examples of a revolving line of credit include personal lines of credit and home equity lines of credit (HELOC).