1. PRO: You can be ready for any emergency
Having revolving credit gives you access to funds whenever you need to. It’s perfect for emergency purchases or if you want to buy big ticket items but currently do not have enough money to pay in full.
2. CON: You can only use it up to a certain amount approved by the bank
Banks assign credit limits to each account holder depending on their credit score. The better the credit score, the higher chances of getting approved for a higher limit. This allows each revolving credit account holder only up to a certain amount to spend or borrow. Once you reach your credit limit, you will not be able to use it until you make partial or full payments that will replenish your credit line.
3. PRO: It’s the fastest way to get extra cash
Depending on the bank where you have a credit line with, revolving credit can be converted to cash to a certain extent. This comes in handy if you have bills to settle or make payments that require you to pay in cash.
4. CON: Your credit score may be affected if you’re not responsible with your payments
Having a revolving credit line is a privilege because the bank trusts you enough to give you easy access to funds. Your responsibility is to pay your dues on time and consistently. Failing to settle your dues can lead to closing your credit line or even prevent you from opening up new ones.
5. PRO: It’s a useful financial tool
Apart from the convenience it brings, a revolving credit line helps diversify your credit mix. This plays a huge role in managing a good credit score. A diversified credit mix shows that you are capable of managing different kinds of credit that can help build a strong credit history.
