REVOLVING CHARGE ACCOUNT Meaning and
Definition
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A revolving charge account is a type of credit account that allows individuals or businesses to make purchases and pay them off over time. Unlike installment loans, which have a fixed repayment schedule, revolving charge accounts provide flexibility in terms of repayment. Through a revolving charge account, the account holder can borrow money up to a predetermined credit limit and use it to make purchases. As payments are made, the available credit balance is replenished, allowing the account holder to continue using the account.
The key characteristic of a revolving charge account is the revolving nature of the credit line. This means that as long as the account holder makes at least the minimum payment due, they can carry a balance forward from one billing period to the next. The account holder is charged interest on the outstanding balance, which increases the total amount owed.
Revolving charge accounts are commonly offered by credit card companies and allow individuals to manage their finances conveniently, by making purchases without immediate payment at the time of the transaction. They provide individuals with the ability to spread out the cost of purchases over time and to make larger purchases that might otherwise be difficult to afford. However, it is crucial for account holders to manage their revolving charge accounts responsibly, paying attention to interest rates and ensuring payments are made promptly, in order to avoid accumulating excessive debt and negative impacts on their credit score.
Common Misspellings for REVOLVING CHARGE ACCOUNT
- eevolving charge account
- devolving charge account
- fevolving charge account
- tevolving charge account
- 5evolving charge account
- 4evolving charge account
- rwvolving charge account
- rsvolving charge account
- rdvolving charge account
- rrvolving charge account
- r4volving charge account
- r3volving charge account
- recolving charge account
- rebolving charge account
- regolving charge account
- refolving charge account
- revilving charge account
- revklving charge account
- revllving charge account
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