A credit opening corresponds to a maximum amount of borrowing, granted by a bank for a given period (for example one year, possibly renewable). It can be used by the beneficiary who can put his current account in a debtor situation if necessary, within the limit of the ceiling granted.
We also talk about authorization of overdraft , overdraft authorized or cash facility, if it allows only debit balances very short but can be repeated, typically a few days per month, the account to become creditor before reactivated the possibility of to be debtor again. Note that an overdraft authorization can also be granted on a piecemeal basis for a single one-time period, which can not be reactivated without further authorization.
These formulas are especially given to professionals and companies to enable them to cope with their jolts of cash need . However, a credit opening of up to one month’s income is often granted to individuals who request it and whose account operating history presents few anomalies.
The credit line should not be confused with the line of credit , which may also entitle other types of credit as part of an overall amount ceiling.
Individuals can resort to a similar form, permanent credit or revolving .