A credit limit refers to the maximum balance that a credit card issuer allows a customer to borrow on their credit card. It is a fundamental aspect of credit management and determines the extent of a cardholder's purchasing power.
A line of credit is an agreement between a financial institution and a borrower that allows the borrower to access funds up to an approved limit, providing flexibility in borrowing. It is not necessary to reapply each time funds are needed, but repayment is expected as the credit is used.
A Revolving Charge Account is a type of credit account that allows for continuous borrowing as long as the account stays within the credit limit and minimum payments are made. It is commonly used in credit cards and lines of credit.
