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Credit Cards vs Personal Lines of Credit...What's the difference?

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Frequent Contributor

Credit Cards vs Personal Lines of Credit...What's the difference?

I've been trying to find more information about this subject on google, and it seems to be a grey area.  What is the main difference between the two?  The advantages/disadvantages? One preferred over the other?  The more details the better.  I'm learning a lot on this website.  I thank all who reply!

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Valued Contributor

Re: Credit Cards vs Personal Lines of Credit...What's the difference?

The biggest difference, is the rights/benefits you get when you pay with a credit card, fruad potection, depending on the card, you may get price protection, theft protection, damage protection, extended warranty, at least 25 days before you are charged interest, zero percent interest, signing bonuses. If you use a personal line of credit, you won't get the protection, and quite possibilly pay a higher interest rate, you may get a bit more freedom from the personal line of credit, but in the end its not the best deal fo rmost.

 

 

Cards: Chase Southwest 20k & CSR 17k & CSP 10k & Freedom 6.6k & FNBO 30k Oregon Duck 5k, & AMEX BCP 32.5k & Hilton Surpass 7.5k & Delta Gold 12k & Zync NPSL, Fidelity AMEX 17k Commerce5.9k & Cash Forward 7.5k & Sams Club MC 20k, Paypal Extras MC 10k, Paypal Credit 7.25k CapOne Venture 15k, QS 2.5k, QS 750, Amazon 10k, Walmart 10k, Citi Simplicity 18k, Discover IT 23k and a nice stack of store cards.
Marcus Loan. 30k second marcus load 15k.
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Valued Member

Re: Credit Cards vs Personal Lines of Credit...What's the difference?

The answer is heavily dependent on the lender, although there are a few key differences.  PLOC's allow you to draw cash without paying an unreasonably high cash advance interest rate that would otherwise apply to an advance on a credit card.  Also, interest rates on PLOC's are, on average, lower than most mainstream credit cards, although this likely isn't the case with cards issued by credit unions.  So PLOC's are a bit more flexible and liquid than credit cards.  The trade off is you incur interest from the date you draw on the line, as opposed to credit cards, which do not incur interest if you pay the full statement balance before the due date.  I have a PLOC, and I love it.  It's been a great source of short-term funding, but I only use it out of necessity.  Convenience is never a factor for me. 

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Frequent Contributor

Re: Credit Cards vs Personal Lines of Credit...What's the difference?


@lostsols wrote:

The answer is heavily dependent on the lender, although there are a few key differences.  PLOC's allow you to draw cash without paying an unreasonably high cash advance interest rate that would otherwise apply to an advance on a credit card.  Also, interest rates on PLOC's are, on average, lower than most mainstream credit cards, although this likely isn't the case with cards issued by credit unions.  So PLOC's are a bit more flexible and liquid than credit cards.  The trade off is you incur interest from the date you draw on the line, as opposed to credit cards, which do not incur interest if you pay the full statement balance before the due date.  I have a PLOC, and I love it.  It's been a great source of short-term funding, but I only use it out of necessity.  Convenience is never a factor for me. 


So lets say a person has a $10K PLOC,  that means they can withdraw cash from that as well since its more of a liquid form?  Does this act like money that you can be used at any time, or does a person has a certain amount of time to use them? Also mentioned short term, so something along the terms of getting a car fixed and having lower interest than a CC if you don't have a 0% promotional balance?

Message 4 of 6
Frequent Contributor

Re: Credit Cards vs Personal Lines of Credit...What's the difference?


@jamesdwi wrote:

The biggest difference, is the rights/benefits you get when you pay with a credit card, fruad potection, depending on the card, you may get price protection, theft protection, damage protection, extended warranty, at least 25 days before you are charged interest, zero percent interest, signing bonuses. If you use a personal line of credit, you won't get the protection, and quite possibilly pay a higher interest rate, you may get a bit more freedom from the personal line of credit, but in the end its not the best deal fo rmost.

 

 


Can you define a bit more freedom with a PLOC vs CC?

Message 5 of 6
Valued Contributor

Re: Credit Cards vs Personal Lines of Credit...What's the difference?


@Boragard wrote:

@jamesdwi wrote:

The biggest difference, is the rights/benefits you get when you pay with a credit card, fruad potection, depending on the card, you may get price protection, theft protection, damage protection, extended warranty, at least 25 days before you are charged interest, zero percent interest, signing bonuses. If you use a personal line of credit, you won't get the protection, and quite possibilly pay a higher interest rate, you may get a bit more freedom from the personal line of credit, but in the end its not the best deal fo rmost.

 

 


Can you define a bit more freedom with a PLOC vs CC?


the ability to write checks to your self, or withdraw via an ATM card, possibly electronic funds transfers to your accounts in the bank and possibly remote accounts as well. The ability to use funds to buy a car, some car dealerships won't allow you to use a credit card to buy a car or even a down payment, the line of credit wouldn't have those restrictions, you can simply ask for a cashier check at your bank with funds backed  by the line of credit. The account can be linked to your checking account to used as overdraft protection, something that isn't as commonly done with credit cards. 

 

 

 

 

Cards: Chase Southwest 20k & CSR 17k & CSP 10k & Freedom 6.6k & FNBO 30k Oregon Duck 5k, & AMEX BCP 32.5k & Hilton Surpass 7.5k & Delta Gold 12k & Zync NPSL, Fidelity AMEX 17k Commerce5.9k & Cash Forward 7.5k & Sams Club MC 20k, Paypal Extras MC 10k, Paypal Credit 7.25k CapOne Venture 15k, QS 2.5k, QS 750, Amazon 10k, Walmart 10k, Citi Simplicity 18k, Discover IT 23k and a nice stack of store cards.
Marcus Loan. 30k second marcus load 15k.
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