Housing and non-housing-related debt continue to trend up for Americans. In early 2025, total credit card debt in the nation was 5.87% higher than the total a year prior. As Americans take on more debt and lenders tighten standards, understanding how revolving credit works becomes increasingly important.
Unlike installment loans, such as auto loans and mortgages, revolving credit doesn’t come with fixed terms and payments. It lets you borrow, repay, and borrow again within a set limit. Credit cards are the most common form of revolving credit, although other types exist.
Revolving credit is also more likely to be unsecured, i.e. have no collateral. For example, auto loans are secured by the vehicle, and that makes a difference in interest rates and other factors. Learn more about revolving credit below.
