Both lines of credit and credit cards are types of revolving credit with many similarities. However, they aren't identical, and it's important to know where they differ so you can make well-informed borrowing decisions.

In this article, we're covering all the similarities and distinctions to help you figure out which one is right for you.

Line Of Credit Vs. Credit Card

A line of credit is a revolving credit that lets you borrow money repeatedly. You can withdraw up to a certain limit and only repay what you use. Provided you don't go over the limit, you can continue withdrawing from the pot of money.

A credit card is a payment method that lets you draw on an agreed credit limit to purchase online, in person, and over the phone. By physically swiping or tapping the card at a terminal, you can charge payments straight to the card. These payments add to your outstanding balance and reduce the available credit until you repay it.

Similarities And Differences Between Line Of Credit And Credit Cards

With both types of revolving credit, you're approved to draw on a certain amount, but there's no need to borrow immediately after you're approved. Instead, you can choose when to borrow and how much to take out, provided it doesn't extend beyond your limit.

Likewise, you'll only pay interest on the amount you take out. And you can keep borrowing while your account remains in good standing.

Despite these similarities, it's worth noting these differences:

Terms And Limits

Credit cards' APR tends to be higher than the APR on lines of credit. Not to mention that the credit limit for the latter is usually higher than a credit card.

Application Requirements

Applying for a credit card necessitates providing accurate information about your finances. Applying for a line of credit, however, requires proving your income. As such, it's slightly more complicated and time-consuming.

Rewards

You don't get any rewards with a line of credit. However, credit cards can offer sign-up bonuses, cashback, and rewards points.

Accessing And Using Funds

You can access a line of credit via online banking, an ATM, and a check. You can access the funds in a credit card via online transactions, ATMs, online banking, in-person transactions, and convenience checks.

When To Use Line Of Credit Over Credit Cards

While you can have both revolving credit types open at once, one product may be better suited to certain circumstances and transactions, as explained below:

• Credit cards are great for everyday spending and earning rewards.
• Lines of credit are best for large purchases.

When To Use A Different Financial Vehicle Altogether

As we've mentioned, lines of credit and credit cards are great for large purchases and everyday spending, respectively. However, they aren't good for everything. For instance, if you're dealing with an emergency, you should tap into your emergency fund. If you don’t have cash put aside in an emergency account, and if your credit card or line of credit is not the best option for your urgent situation, consider quick loans, such as title pawns from Georgia Auto Pawn, Inc.

With a title pawn, you can borrow up to $15,000, depending on the value of your vehicle, to cover emergencies like medical bills, veterinary fees, home repairs, and other crises. With this type of loan, the more your vehicle is worth, the more you can borrow. It's as simple as that — you just need to own your vehicle outright and have a valid ID. 

Once you've sorted out the requirements, follow the following steps to get your hands on a title pawn from us:

1. Use our convenient online inquiry form or call us to start the process. The former sends your information straight to the location of your choice (i.e., your nearest Georgia Auto Pawn, Inc. branch).
2. Answer your phone when we call you to confirm your information, explain the simple required items, and answer any of the questions you might have about title pawns.
3. Choose the location to meet us. You can come to our nearest store, or we can come to your home or workplace if you are applying for an online title pawn.
4. When you meet us, we will conduct a quick, five-minute inspection of your vehicle to establish the amount of money you qualify for. 
5. Then, we will explain the approval process and answer any questions you still have. 
6. Following that, we'll show you where to sign the forms.
7. Finally, you will receive the loan money you qualified for on the same or the following business day. Specific timeframes vary.

Seek An Alternative Loan From Georgia Auto Pawn, Inc. Today!

While credit cards and lines of credit have similarities, they're useful for different reasons. Credit cards are good for rewards and everyday spending, while lines of credit are perfect for large purchases.

But if you're dealing with financial emergencies, you may want to look for an alternative, like our Georgia title pawns. Get a title pawn from today by completing our online inquiry form or calling a branch near you!

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.