1.Interest Rates

Line of Credit: Competitive rates, often lower.

Credit Card: Higher rates, especially in case of defaults.

2.Minimum Payments

Line of Credit: Weekly or monthly payments based on the utilized balance, with little variation unless you have late payments.

Credit Card: Minimum payments, but interest accrues on the remaining balance.

3.Application Requirements

Line of Credit: Generally requires detailed financial information and a solid credit history.

Credit Card: May require less documentation but with lower initial limits (available amount to use). The amount can be a point to consider if you'll use it for your business, where you need to move larger sums than for personal expenses.

4.Credit Impact

Line of Credit: Can improve your business credit score if used responsibly.

Credit Card: Proper use can enhance personal credit, while high balances can negatively impact it.

Conclusion

Both options have their advantages depending on your intended use. It's important to consider having a line of credit for your business, as this will allow your business to start building credit history, which will greatly help for future financing with better rates and terms.

If you need assistance, remember that at Capifinders, we have a network of over 75 lenders nationwide that allows us to always find the best solution tailored to your profile and needs.