Lines of Credit vs. Credit Cards (and Which Ones Right for You)?

At Prosperity Credit Union, we know finances can feel like a foreign language—one where the dialect includes phrases like “revolving credit” and “available limit.” But don’t worry—we're here to break things down, neighbour-style.

So let’s talk about two common ways to borrow money: a line of credit and a credit card. Both can help cover the unexpected or smooth out your cash flow, but they work a little differently—kind of like comparing a pickup truck to a zippy little hatchback. Both have their perks. Let's take a spin.

Credit Cards: Like a Wallet-Sized Power Tool

A credit card is handy for day-to-day purchases like groceries, gas, or that new rake you didn’t know you needed until it was 40% off. You can use it pretty much anywhere, earn rewards (depending on the card), and it often comes with some sweet perks like purchase protection or travel insurance.

But heads-up—if you carry a balance, the interest rates can be pretty steep. Credit cards are great for short-term borrowing, but they’re not the cheapest way to finance bigger expenses over time.

Best for:

• Everyday spending
• Booking travel or shopping online
• Earning points or cash back
• Emergencies (flat tire, furnace quits, you name it)

Line of Credit: Like a Financial Safety Net (That Doesn’t Fit in Your Pocket)

A line of credit is a more flexible, low-interest way to borrow money when you need it. You get approved for a certain amount (say $10,000), and then you can dip into it as needed—like filling a water trough from a well. You only pay interest on what you use, and the rates are usually much lower than credit cards.

You won’t find a line of credit in your wallet (no card required), but it’s a solid backup plan for bigger needs—think home renos, or helping your kids get through university.

Best for:

• Larger, planned expenses
• Backing you up in case of financial hiccups
• Lower-interest borrowing
• Consolidating higher-interest debt

So... which one’s for you?

If you're looking for something for everyday use, a credit card might be your jam. But if you're thinking ahead or want access to money without the high rates, a line of credit is a quiet hero.

And hey—you can have both! Some of our members use a credit card for regular purchases and keep a line of credit on standby “just in case.”