Difference Between Credit Card and Line of Credit
When running a business, it is often necessary to open a credit account. With an established credit profile, a business owner can buy products and services on credit and build the company. With that being said, there are multiple lines of credit and loan products available. The two most popular styles of loans are credit cards and lines of credit; both offer distinct advantages to an entrepreneur. Here is a quick guide on the difference between a credit card and a line of credit.
With a credit card, a consumer can, at his or her leisure, spend money on any number of items. When heading to a store, going online or buying a big-ticket item, one can whip out their card and buy whatever they desire. However, when buying extremely expensive items, a buyer will, often, run into problems. For starters, some credit card companies do not dole out high credit limits. This is problematic for a business owner who needs to buy a $10,000 item with a low credit limit card. Luckily, with most Florida credit card processing providers, a consumer will have an easy time making large purchases.
When using plastic, an entrepreneur can, with ease, use credit card processing services to pay for monthly bills such as insurance or utilities. This is a serious advantage as the owner can run the numbers easier and save time paying bills with an automated setup. Without a doubt, this is a huge benefit to using a credit card as credit card processing services can automatically charge a card.
Now, a line of credit is different from a credit card. When getting a line of credit, a borrower will usually have to present his or her case for the money. For example, when looking for Florida credit card processing services, one can state their need for it and get a line of credit. Of course, for a new business owner, this is a difficult task as some banks and lending institutions fear lending money when a person has a low credit score. However, for one-time costs such as a Florida credit card processing account, one can get a line of credit.
When getting line of credit, a customer will need to head to a bank or lending institution. This is similar to a credit card as most people will use the same process. Without a doubt, this is not always easy to qualify for, and a person must try to persuade the bank to open the credit line.
A small business owner looking for Florida credit card processing can obtain the funds with a credit card or line of credit. Both have advantages and a smart consumer should explore his or her options.