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Line of Credit or Credit Card?

Line of Credit vs a Credit Card? What is Right for You?

Right now, you may be looking for some additional flexible credit to help you through the uncertainty we are facing as a nation. The two most available forms of flexible credit are lines of credits and credit cards. There are a few things to consider when looking at these products, and you shouldn’t rush into either. Always talk to a financial expert at your credit union before making any final moves.

Credit Cards

Credit cards are an excellent secure means to pay for things online, in person, or through subscriptions, but they do come with a cost – which in some cases can be quite high. Credit cards are considered high interest debt as interest is paid on purchases, often in the double digits, and minimum monthly payments are mostly designed to cover the interest and only a small amount of principle. The higher the debt load on a credit card, the higher the interest payments, and the longer it will take to pay off the principle.

The best use of a credit card is to pay for things you already have the money for, to earn points, rewards, etc. It’s also the best tool for paying for things online as there are built-in security features to protect you from fraud.

Lines of Credit

A line of credit is not entirely unlike a credit card, as it provides a flexible account with the ability to spend or pay down the balance on your own schedule, usually at a lower interest rate from a credit card. It cannot be used to make online purchases and is often best used to pay down high-interest debt, make larger purchases, or provide a rainy-day fund of sorts, if you don’t have one saved already.

A line of credit should not be used as ‘free money’. It is a tool to help stabilize your financial situation in a number of different ways and post-pandemic, might be worth considering if you’re facing high-interest debt or other financial uncertainty.

As always, talk to a financial professional at your credit union before making any major decisions.


Main Branch

913 Main Street E.
Box 1510 Swan River,
Manitoba R0L 1Z0

Phone: 1-877-218-7828
Fax: (204) 734-3968

Benito Branch

103 Main Street
Benito, Manitoba
R0L 0C0

Phone: (204) 539-2400
Fax: (204) 539-2401

Minitonas Agency

Minitonas Community Store
267 2nd Ave.
Minitonas, MB R0L 1G0

Phone: (204) 525-2623
Fax: (204) 525-2624

© Swan Valley Credit Union