how to setup a revolving credit facility account

[Ariel]

On Sun, 3 Jun 2007, Cam Ellison wrote:

> David Latham wrote:

>> It looks like this might be the best way to go about it.  I still find
>> it unfortunate that there is no way to record the available credit
>> because: It is in fact an asset.

> I beg to differ.  It is not cash you actually possess, nor a certificate
> invested with some kind of value.  If you take money from it and put it
> into another account, that money is an asset, with an offsetting
> liability that costs you in interest.

He's right: your available credit is NOT an asset. It's not anything 
except a number saying how much the bank is willing to lend you right now.

Now, if you tell me that the bank will lend you only as much money as you 
have house to back it up then I will tell you that your _house_ is an 
asset.

If you want to know your credit limit is, just subtract how much you 
borrowed from how much your house is worth.

But a credit limit is not an asset.

 	-Ariel