What type of credit involves a limit that can be borrowed against repeatedly?

Open-end credit refers to a borrowing arrangement where the borrower has a credit limit that they can draw against multiple times, as long as they do not exceed that limit. This type of credit is typically associated with credit cards or revolving lines of credit, allowing consumers to borrow, pay back, and borrow again without having to reapply for credit each time.

In contrast, closed-end credit offers a specific amount of money that is borrowed all at once, and the borrower repays that amount through fixed payments over a set period, with no additional borrowing allowed against that loan. Fixed-rate credit and non-revolving credit also relate to structured repayment arrangements rather than the flexibility and repeat borrowing characteristics typical of open-end credit. Thus, the definition and nature of open-end credit clearly highlight why it is the right choice in this scenario.