Credit card vs. line of credit.

Regular monthly expenses, like recurring payments and purchases you’ll pay off in the short-term.

Larger expenses, like home renovations or education, that you’ll pay off over a longer period of time.

You can borrow up to an agreed upon limit. Depending on factors like your credit history and how high your annual fee is, your credit limit can range from a few hundred dollars, for those who are rebuilding or new to credit, to the mid-five figures for luxury credit cards that come with a lot of perks.

You can often borrow more than with a credit card. Limits for a line of credit typically start at $5,000 and can reach into the six figures. Like a credit card, you may borrow only as much as you need at any time.

When a purchase appears on your monthly statement for the first time, you won’t be charged interest if you pay it off before your payment due date. But after that grace period, you’ll be charged monthly interest on anything left unpaid.

If you’re a Capital One customer, you can double check your due date on the app or online and set up alerts to let you know when your payment’s due.

For a cash advance, interest will likely be charged right away and at a higher rate.

Though the interest rate may be lower, you’ll be charged interest every day from the time of purchase.

The interest rate is usually variable, so it may go up and down over time. If you don’t like the sounds of that, lines of credit with fixed interest rates are also available.

To avoid paying interest, you’ll need to pay off your balance every month before the due date.

If you can’t pay off the full balance, try to make at least your minimum monthly payments. These are calculated based on a percentage of your credit card debt, and will help you avoid penalties like late fees.

You’ll still pay interest on any balance that’s left over after your monthly due date, but you’ll be better off than if you hadn’t made any payments at all.

You’ll make minimum monthly payments, which are usually equal to the interest.

Applying for a credit card will impact your credit score, but using it responsibly over time can also help you build it. To avoid impacting your credit score, Quick Check^® can show you which Capital One credit cards you’ll be approved* for before you apply.

Opening a line of credit can impact your credit score, but using it responsibly by making payments on time can also help you build it.

Credit cards are widely accepted and are especially useful when you want to shop online, rent a car or provide a security deposit. They can also come with benefits, such as insurance or rewards. Be sure to check the terms before you apply.

You can access your money by writing a cheque, making a withdrawal from an ATM or using telephone or online banking to pay a bill or transfer money to another account.

You may be charged an annual fee, transaction fee, cash advance fee or foreign transaction fee. Similarly, a secured credit card would also require security funds up front.

A financial institution could charge you fees such as a registration fee to start or an annual administration fee. You could also be charged a withdrawal fee, a.k.a. a draw fee, to take money out.