What is revolving credit? A. A type of credit where you borrow a fixed amount and repay it in installments.
B. A type of credit where you can borrow, pay off, and borrow again up to a predefined amount.
C. A type of credit that does not accrue interest.
D. A type of credit used exclusively for mortgages.
The correct answer is B. A type of credit where you can borrow, pay off, and borrow again up to a predefined amount.
Explanation: Revolving credit allows consumers to draw from a credit line repeatedly without having to reapply for credit each time. As you pay off the borrowed amount, your credit limit becomes available again, which provides flexibility in borrowing and repayment. Common examples include credit cards and lines of credit.