Credit Card and Line of Credit

Only use credit card if you have the discipline and the capacity to pay it off regularly. I use it for all my purchases and then I pay the whole balance before the due date. This way, I am using it to my advantage because aside from improving my credit score I am also getting cash back from it.

Line of credit usually has a larger room to borrow money from and most of the time has lower interest rate than credit cards. I have never seen or been offered a line of credit that has higher interest rate than credit cards.

It can be useful to have a line of credit especially if you have a balance in your credit card that you are unable to pay immediately. Since it has lower interest rate, the amount of the interest being added to your balance will be less and you will have more time to clear your debt before it grows to uncontrollable level.

Like credit card, if you let your balance in your line of credit grow then you will have difficulty paying it. It can give you some temporary breathing room but you need to solve the root cause of why your debt is growing.