What type of loan is a credit card?

A credit card is considered a type of revolving credit loan. Unlike traditional installment loans, which have fixed repayment terms and amounts, credit cards allow borrowers to access a predetermined credit limit and make purchases as needed. Borrowers can pay off the balance in full or make minimum payments, with interest accruing on any unpaid balance. This flexibility makes credit cards a convenient but potentially costly form of borrowing if not managed carefully.