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okay this is dfi explain her line of credit what is a line of credit what is a line of credit and how do you use one well a line of credit is a borrowing option where youre approved upfront for a set credit limit that you can draw on whenever you want youre not charged interest on the full credit limit you only pay interest on the amount you borrow you could borrow pay it down and borrow again and again as long as you dont exceed your total approved limit a line of credit might be drawn on with checks or balance transfers much like a bank account or it can be tied to a debit card for ease of use just like a credit card the difference between a line of credit and a credit card is that there is no grace period a line of credit is not a payment tool its a borrowing tool you start incurring interest the day you use it people use a line of credit to pay for education consolidate debt or pay for home renovations if your line of credit is secured by your home its called a home equity li