LAW OF ACCOUNTANCY AND FINANCE DEPARTMENT Revolving Credit: Determination of a Representative Balance

REVOLVING CREDIT is a modern-day innovation which evolved because of the special credit needs of certain consumers. Today it has become an extremely successful selling technique for many retailers. Concomitant with its develop- ment, a need arose for legislation to effectively regulate this new credit mechanism. In response to this need the states enacted regulatory schemes reflecting a variety of approaches to the problem. Perhaps the most contro- versial aspect of the resulting revolving credit laws is the provision denoting the balance upon which the monthly finance charge is assessed.