A type of credit where you are given access to money that you can borrow and pay back at any time, up to a certain limit.

• A. Credit limit
• B. Revolving credit
• C. Installment credit
• D. Secure credit

Answer: (B)

Revolving credit is a flexible arrangement that lets you access funds up to a defined credit limit and borrow, repay, then borrow again as needed. You don’t take out a single lump sum and stick to fixed payments for a set term. Instead, you can borrow what you need, repay part or all of what you owe, and continue using the credit up to the limit, typically with a minimum payment required each billing cycle and interest charged on the outstanding balance. This setup—ongoing access to funds, with borrowing and repayment allowed repeatedly up to a limit—is exactly what’s described.

Credit cards and lines of credit are common examples of revolving credit. By contrast, an installment loan involves borrowing a fixed amount and repaying it in regular, fixed installments over a set period. Secured credit requires collateral, like a home or vehicle, to back the loan. The term “credit limit” refers to the maximum amount you’re allowed to borrow, not the way the borrowing and repayment work.