Listen to a Business English Dialogue about Revolving credit
Charles: Hey Eden, have you ever used revolving credit before?
Eden: No, I haven’t. What exactly is revolving credit?
Charles: Revolving credit is a type of credit that allows you to borrow money up to a certain limit and then repay it, with interest, over time. Unlike installment loans, you can borrow, repay, and borrow again, as long as you stay within your credit limit.
Eden: Oh, so it’s like having a line of credit that I can use whenever I need it?
Charles: Exactly. It’s often used for everyday purchases or unexpected expenses because of its flexibility.
Eden: Are there any advantages to using revolving credit over other types of loans?
Charles: One advantage is that you only pay interest on the amount you borrow and not on the entire credit limit. Plus, it can help build your credit history if you make timely payments.
Eden: That sounds useful. But are there any drawbacks to revolving credit?
Charles: Well, if you’re not careful, it’s easy to accumulate debt since you can continuously borrow. And if you only make minimum payments, the interest charges can add up quickly.
Eden: Ah, I see. So it’s important to manage revolving credit responsibly.
Charles: Exactly. It can be a valuable financial tool, but it requires discipline to avoid overspending and falling into debt.
Eden: Thanks for explaining, Charles. I’ll keep that in mind if I ever consider using revolving credit.