Credit Card Vs Credit Line Cards: Which is better for you?

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October 08, 2020 4:00 PM

Even though the credit line cards are quite similar to personal loans, they can also be used to withdraw cash from any ATM along with being swiped at any POS terminal.

Credit card vs credit line card, credit card, personal loan,

The pandemic caused various types of financial crises for people all around the world, because of which they had to adopt various measures to deal with them, apart from taking loans and using their credit cards.

Tushar Aggarwal, CEO and Founder of StashFin, says, “One cannot ignore the fact that the average income group faces a continuous battle between savings and unpredictable expenses on a month-on-month basis, especially during these testing times of massive salary cuts.”

During such times, opting for personal loans and using credit cards, etc. become a norm. With the help of such measures, people are able to arrange funds whenever they are running out of necessary funds for their monthly expenditure or unpredicted expenses. However, if the repayment gets delayed, the outstanding balance grows, which proves to be one of the most stressful factors, particularly in case of credit cards.

Having said that, there are other options such as credit line cards, that most people are not aware of. Credit line cards allow borrowers, especially salaried and self-employed individuals, to avail of an instant personal loan.

While credit cards provide a limited time period to repay the borrowed credit, credit line cards – which are similar to personal loans — provide the flexibility of repaying the borrowed credit with respect to the number of installments taken to repay. Hence, Aggarwal says, “Credit line cards do not turn out to be a burden in case of higher spend in a certain month.”

Experts also suggest that borrowers with high credit card debt could take the help of credit line cards to get rid of their debts, especially because of the difference in interest charged by both the credit options.

Aggarwal says, “Opting for a credit line card and repaying credit card debt with the respective amount could be one of the wise and practical decisions. In fact, with a credit line card, the Annual Percentage Rates (APRs) are approximately 30 per cent, while the APR for a credit card is around 48 per cent, which speaks volumes about which should be the preferred choice for individuals.”

Banks, credit card companies, and NBFCs charge a certain amount of fees, which is inclusive of pre-payment fees and other hidden charges. Individuals with a higher credit score easily receive credit cards and personal loans compared to the ones with a lower credit score. Aggarwal says, “The EMI option introduced by virtual credit lending companies allows individuals with 15,000+ income to easily lookout for credit line ranging from Rs 1000 to Rs 5 lakh with repayment periods up to 3 years.”

Even though the credit line cards are quite similar to personal loans, they can also be used to withdraw cash from any ATM along with being swiped at any POS terminal. Borrowers will also be able to make purchases at any online website and make instant transfers to the Paytm wallet.

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