New Delhi, May 30 -- In personal finance, revolving credit is a key concept that impacts short-term spending as well as an individual's long-term financial position. Understanding revolving credit and the consequences of it is critical for effective debt management and adequate financial planning.

Revolving credit is a type of credit arrangement that allows borrowing money to a limit. Unlike an instalment loan, where the borrower borrows a lump sum and is required to pay it back according to specified terms, revolving credit allows more flexibility. In particular, as long as you stay within your credit limit, you can borrow money, repay it, and borrow it again.

Revolving credit has 4 key elements:

Akshay Aedula, product and growth, CRE...