How Does Revolving Credit Work on your Credit Card?

How Does Revolving Credit Work on your Credit Card?

For an instance, you have a total credit limit of Rs. 1 Lakh and you purchase a product worth Rs. 15,000 on this card. At the moment, you still have Rs. 85,000 to spend. As soon as your bill gets generated for the given period, you will need to pay Rs. 15,000 in full. However, the credit card provider also gives you the option of paying a ‘minimum amount’ and carrying forward or ‘revolving’ the balance to the next billing cycle. This way you can use the rest of the limit available to you.
You can carry on using the available limit by paying the minimum amount due. As you keep making payments, it retains adding to your available limit giving you more purchasing authority on the card.
The only advantage of having access to a revolving credit account is that you can cover financial crises without waiting to apply for a loan and its approval. Finance charges and other fees must be kept in mind.

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