Open-end credit


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Related to Open-end credit: credit facilities

Open-end credit

Revolving line of credit that is extended with every purchase or cash advance.

Line of Credit

An agreement between a bank and a company or an individual to provide a certain amount in loans on demand from the borrower. The borrower is under no obligation to actually take out a loan at any particular time, but may take part of the funds at any time over a period of several years. This agreement is fairly common in situations in which a business must make payroll but does not always have the operating income to do so, especially when its operating income is seasonal or otherwise varies from month to month. It is also called open-end credit or a revolving line of credit. See also: Credit Card.
References in periodicals archive ?
The cost of open-end credit is given by the after-tax interest rate R, and |Rho^ is the subjective time-discount factor.
34--Prohibited Acts or Practices in Connection with Credit Secured by a Consumer's Dwelling; Open-end Credit is added; and
iii) In the case of a credit card relationship or other open-end credit relationship, you no longer provide any statements or notices to the customer concerning that relationship or you sell the credit card receivables without retaining servicing rights; or
Section 114 of the Conference Report would amend TILA to require that creditors offering open-end credit plans, such as credit cards, provide additional disclosures about minimum payments as well as arrangements in which consumers may "skip payments" while interest continues to accrue on the unpaid balance.
For example, there are separate rules for closed-end credit, such as automobile or home mortgage loans, and for open-end credit, such as credit cards or home equity lines of credit.
Under the current Truth in Lending Act, creditors that mention specific costs in advertisements for any type of open-end credit product must also disclose other relevant cost information.
Before the enactment of HELCPA, home equity credit plans were treated like other types of open-end credit plans for purposes of account disclosure and advertising rules under Regulation Z.