What type of credit is exemplified by using a credit card to buy a new jacket and paying off the charge over several months?

The use of a credit card to purchase a new jacket and pay off the charge over several months is a clear illustration of revolving credit. This type of credit allows consumers to borrow money up to a certain limit, repay it, and then borrow again as needed. When you make a purchase with a credit card, you are given a line of credit that you can use for various transactions, and you can carry a balance from month to month.

With revolving credit, you have the flexibility to make minimum payments and carry the remaining balance, which can grow with interest if not paid in full. This is different from installment credit, where you have a fixed amount of money borrowed that you pay back in equal installments over a specified period. Single-payment credit involves borrowing a set amount to be repaid in full by a specific date, and secured credit uses collateral to back the loan, which is not the case with typical credit card usage. Thus, revolving credit captures the ongoing nature of the transaction perfectly.