Revolving Account

A revolving account is an account created by a financial institution to enable a customer to incur a debt, which is charged to the account, and in which the borrower does not have to pay the outstanding balance on that account in full every month. The borrower may be required to make a minimum payment, based on the balance amount. However, the borrower normally has the discretion to pay the lender any amount between the minimum payment and the full balance. If the balance is not paid in full by the end of a monthly billing period, the remaining balance will roll over or "revolve" into the next month. Interest will be charged on that amount and added to the balance.

A revolving account is a form of a line of credit, typically subject to a credit limit.

See also

• Installment credit
• Loan

0.00 (0 votes)