Should I Get a Business Credit Card or Line of Credit? | CreditShout

Should I Get a Business Credit Card or Line of Credit?

By Kaitlin T / February 17, 2011

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Q: I’m torn between getting a business credit card or a line or credit. Which is a better choice? What are the differences?

A: As with most things in life, neither is clearly better than the other. Both have their benefits and drawbacks. Depending on what you want to use them for, however, you may find that one meets your needs better than the other. You may even find that you have a use for both.

When you need to make a large business purchase, you should look for a line of credit. Because it is usually secured, a line of credit can allow you a lower interest rate and a larger credit limit than a credit card. When making a large purchase, low interest rates are vital to saving you money. Of course, this means that you will have to provide something as collateral. If you don’t have anything to use as collateral, you will have to go with an unsecured line of credit which will have a higher interest rate and may not grant as much credit.

If convenience is what you’re after, a line of credit may not be for you. Since lines of credit take a little longer to access your money than just swiping a card, you may want a credit card instead. Credit cards are what you need for convenient purchases of office supplies or other small expenses. The rates are often much higher though, and credit limits are lower. Another option instead of a business credit card would be to get a checking account for your business and finance smaller expenses with cash.

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