Home Equity Lines of Credit versus Credit Cards

Home Equity lines of credit and credit cards are both very similar in that they are both lines of credit in which the person can use at any point. In order to understand each fully, you must understand the similarities and differences between the two before you make a decision on which one is the best option for you.


Both lines of credit are open ended, meaning that you can access them at any time. In addition, they both also usually offer low interest rates during the introductory period and they both have variable rates that are based on current indexes. Plus, they both utilize a card for the borrower to access the funds on the account.


The home equity line of credit has a certain time period in which the funds can be accessed, the credit card does not. Most credit cards have a higher interest rate than home equity lines of credit. The biggest difference is that the interest paid on home equity lines of credit are tax deductible, whereas the credit card interest is not.

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