Line of Credit vs. Credit Card

A line of credit and credit card are two types of revolving credit. Both options allow you to borrow as much or as little as you’d like, up to a set credit limit. However, there are some important differences between them. Let’s take a closer look at a line of credit vs. credit card so you can decide which option is right for you.

What is a line of credit?

With a line of credit, you can withdraw money repeatedly. You may do so through special checks or direct deposit, up to a set credit limit. Then, you may repay what you owe plus interest at once or through regular payments over time. Once you pay back your line of credit, the funds will become available to you again.

What is a credit card?

A credit card allows you to draw on funds to make day-to-day purchases in-person, online, or over the phone. You’ll be required to make at least a minimum payment by the due date of every billing cycle. If you don’t, you’ll be on the hook for interest charges and other fees. Many credit cards feature rewards, like cash back and travel points.

Key differences of lines of credit vs. credit cards

While lines of credit are usually for big-ticket purchases, credit cards are designed for everyday spending. Compared to credit cards, lines of credit tend to offer larger borrowing amounts and lower interest rates. Unlike credit cards, however, they don’t come with rewards or grace periods.

Do lines of credit and credit cards affect your credit score?

Both lines of credit and credit cards can have a positive and negative impact on your credit score. When you first apply for a line of credit or credit card, the lender or credit card company will do a hard inquiry on your credit, resulting in a slight credit score decrease. But luckily, this impact is only temporary. Lines of credit and credit cards can also boost your score significantly if you continue to make on-time monthly payments and avoid any late or missed payments.

Should I get a personal line of credit or a credit card?

If you need money to cover everyday expenses like gas and groceries, a credit card may be a good option, especially if you qualify for one with a great rewards program. But if your goal is to borrow cash for a big-ticket purchase or a project like a home improvement project and you can lock in a low interest rate, a line of credit may be the right choice.

How to apply for an Advance America line of credit

Follow these steps to apply for a line of credit from Advance America:

1. Gather all necessary documents

When you apply for a line of credit, Advance America will require certain information and documents. These include a government issued ID like a passport or credit card, a source of income, a valid and active checking account, and a Social Security number or ITIN.

2. Go to Advance America’s website or visit a nearby store location

You can fill out the application for a line of credit online, from the comfort of your own home or office. But if you prefer to complete the process in-person, simply visit an Advance America store close to you.

3. Fill out a line of credit application

Complete the entire application for a line of credit. To do so, you’ll need to share basic personal information as well as a few details about your finances. You may also be asked to provide documents like your government issued ID.

4. Submit your application

Check your application thoroughly to look for errors and inaccuracies. This can help you avoid delays with approval and funding. Once everything looks good, submit your line of credit application and wait for approval.

5. If approved, receive your funds

Upon approval, Advance America will distribute the money. This may be the same day you apply or within 24 hours, depending on when you apply for a line of credit.

Get a line of credit today

Advance America offers lines of credit that offer a flexible form of financing. You may be able to borrow up to a few thousand dollars and use the funds for anything you wish, up to your set credit limit. You’ll only pay interest on the money you withdraw, and the rest will remain available if you need it. Visit Advance America today to learn more about our lines of credit.

The Advance America advantage

Since 1997, Advance America has helped millions of hardworking people with a variety of financial solutions including Payday Loans, Online Loans, Installment Loans, Title Loans and Personal Lines of Credit.
157+ million
loans issued
800+ stores
and online loans
25+ years
providing loans