What is the difference between a credit card and a line of credit?

LOS ANGELES – April 4, 2022 – (



iQuanti: Credit cards and lines of credit are two of the most popular ways to build up credit for budgeting and future spending. Although both are types of revolving credit and come with a set credit limit, there are also some differences between a credit card and a line of credit online. One of the most notable distinctions is that not all lines of credit are tied to a card, but the differences don’t end there. Let’s dig into some key differences between lines of credit and credit cards so you can decide which option is best for your needs.

Interest rate

When it comes to interest rates, credit cards generally have higher APRs than lines of credit. While you may see slight differences between unsecured and secured lines of credit and secured and unsecured credit cards, this rule of thumb is generally true.

Some credit cards have an initial interest grace period that is generally not standard for lines of credit. This could be appealing to any users who might need to benefit from cash flow without the upfront hassle of interest. But keep in mind that this is temporary and the credit card APR could be much higher than line of credit rates anyway.

Credit limits

Credit cards often have lower credit limits to minimize risk. Lines of credit, on the other hand, allow you more flexibility over general credit limits, so you may be able to tap into more funds. If you need more money to fund your expenses, a line of credit may be the right choice for you.

Approval process

There are often slight differences in the approval process for credit cards and lines of credit. Since lines of credit offer more flexibility, some require a better credit score and a higher debt-to-equity ratio than a typical credit card user. Fortunately, there are also plenty of line of credit options designed for borrowers with weak and fair credit. If you fall into this category, be sure to look for lenders with more lenient credit score requirements.

Rewards and Benefits

One of the greatest strengths of credit cards is their rewards program. Repeated monthly payments and a well-managed balance can earn you wonderful benefits and rewards, which vary depending on the card you’ve chosen.

Lines of credit, however, do not offer rewards programs. This could make them less appealing to users looking for a line of credit that they can get rewards from.

The bottom line

Although there is no right choice between credit cards and lines of credit, you can help make your decision based on your financial situation and preferences. If you want access to funds with a lower APR, a line of credit may be the right option. And if you want to receive rewards for spending, you should consider getting a credit card. Do your research and weigh your options to choose the right option and get the funds you need fast.

Notice: The information provided in this article is provided for guidance only. Consult your financial advisor about your financial situation.

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What is the difference between a credit card and a line of credit?

About Shirley L. Kreger

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