Revolving Credit (redirected from revolving credits)

Revolving Credit

A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs.

Often referred to as "Revolver."

Notes:

Revolving lines of credit can be taken out by both corporations and individuals. The bank that is in agreement with the customer guarantees a maximum amount that can be lent to the customer. Along with the commitment fee there is also interest expenses for corporate borrowers and carry forward charges for consumer accounts.

See also: Cash Flow, Cost of Carry, Credit, Default, Financing, Line of Credit