Which statement best describes a revolving credit plan?

A revolving credit plan is characterized by its flexibility and the ability for borrowers to repeatedly borrow up to a certain limit. The correct description highlights that it involves a commitment fee, meaning lenders charge a fee for keeping the line of credit available, regardless of whether the consumer actually uses it or not. Moreover, the usage can fluctuate, allowing consumers to borrow as needed, repay, and borrow again without having to reapply for credit each time.

In contrast, a typical loan that must be paid back in full each month represents an installment credit rather than a revolving structure. A line of credit primarily used for long-term investments does not accurately reflect the nature of revolving credit, as this type of credit is more commonly used for variable and short-term financial needs. Lastly, describing a fixed credit limit that cannot be exceeded suggests a more rigid credit arrangement, such as a loan or installment credit, which differs from the fluid usage pattern of revolving credit plans.