What’s the difference between a line of credit and a credit card?

Line of credit vs credit card: which is right for you at Fox Communities Credit Union?

Depending on your goals, both a line of credit and a credit card can bridge the gap in your finances. When deciding which one to go with, one may cost you more than the other, so it’s important to consider any fees and limitations that may apply to them.


A line of credit is a flexible loan that can be used however you wish, as opposed to a fixed loan where you borrow a specific amount to pay back with interest over time. With a line of credit, you borrow cash, while credit cards are meant to fund your purchases without the need for cash. While you can often take out a cash advance with a credit card, these generally come with fees and interest rates that make them more expensive than a line of credit.

Credit cards are ideal for making everyday purchases but can also be used for larger purchases. They are useful when you want to have a way to make payments while on vacation, shopping online, or if you just want to make purchases without having to carry cash. A line of credit is typically used for large purchases, which pairs well with their generally lower interest rates.

Find out which option could be best for you by speaking with a Fox team member!

Financial education tips are provided by BALANCE and CNET. Services offered through BALANCE are separate and distinct from any business conducted with Fox Communities Credit Union and are not guaranteed by or obligations of the Credit Union. For more information visit foxcu.org/balance.