 TITLE: Understanding Revolving Credit CONTENT: How Does Revolving Credit Work?\n-------------------------------\nA revolving credit account sets a credit limit—a maximum amount you can spend on that account. You can choose either to pay off the balance in full at the end of each billing cycle or to carry over a balance from one month to the next, or \"revolve\" the balance.\nWhen you revolve a balance, you'll have to make a minimum payment each month. This may be a fixed amount, such as $25, or a percentage of your total balance, whichever is higher; you can find specifics in the fine print of your revolving credit agreement. You'll also be charged interest on the balance that is carried over from month to month. (The exception is a credit card or line of credit with a 0% interest introductory period.) You may also have to pay other fees, such as annual fees, origination fees or fees for missed or late payments.\nExamples of revolving credit include credit cards, personal lines of credit and home equity lines of credit (HELOCs). Credit cards can be used for large or small expenses; lines of credit are generally used to finance major expenses, such as home remodeling or repairs. A line of credit allows you to draw money from the account up to your credit limit; as you repay it, the amount of credit available to you rises again. END