Revolving Credit
Revolving credit programs do not have a fixed number of payments. Examples of revolving credit products used by consumers include credit cards, line-of-credit loans and home equity line of credit. Typical characteristics of revolving credit products include:
- The borrower may use or withdraw funds up to a pre-approved credit limit. The amount of credit available can increase or decrease as the loan is borrowed and repaid.
- Typically, the loan is used repeatedly. The payments are made on the amount of money borrowed and repaid plus interest owed.
- The borrower may repay over time (subject to payment requirements) or in full at any time.
- In some cases, the borrower is required to pay a fee to the lender for money tat is not used on the revolving line.
Credit cards represent a product area where credit unions are demonstrating their philosophy of people helping people through concrete action. Credit unions balance good business practices with cooperative principles help members with credit card products that offer fair rates with reasonable fees while also educating members about wise use of credit.
Credit unions simply do not offer credit cards with predatory fees. Most view themselves as being in the business of helping members with no credit history or blemished credit get on the road to creditworthiness. Credit union credit cards are a lifeline to members in a financial services environment that is sometimes predatory—especially for low-income Americans.
