How do I get a Line of Credit?

In order to get a line of credit, a person must submit an application to a financial institution that offers loans or credit cards. One of the most common ways to get a line of credit is to apply for a credit card. For people who are applying for their first line of credit, it is usually best to apply for a small line of credit. Once one begins to develop a good credit history and learns to manage the line of credit well, the credit limit can be extended if the crediting financial institution is willing to do so. Another way to get a line of credit is to have the credit line attached to one's checking account.

A line of credit that is attached to a checking account is often smaller than a line of credit that is extended to a customer who has been approved for a credit card. This kind of line of credit often functions as part of an overdraft protection program. Be cautious when using this kind of credit line as there may be a steep fee for each use. The fees for using a credit card are usually lower as long as the user makes sure to pay his bill on a timely basis.

One of the first and most important steps for those who want to get a line of credit is to shop around and explore one's options. Not all lines of credit offer the same benefits and some come with much higher interest rates than others. Be sure to weigh the benefits that may be used to lure in customers against the fees and interest rate that are associated with the card. A free gift or gift certificate that is offered for signing might not seem worth it months or years later when one is paying high annual fees or dizzying interest rates. Also, be wary of teaser interest rates that start low and then zoom out of control.

Those who want to get a line of credit should also be reasonable about the amount of credit limit. A high credit limit might seem attractive, but can lead to serious financial trouble for people who are prone to shopping binges and impulse purchases. While preparing to get a line of credit, it is also smart to set some personal rules for how and when the credit will be used. It is also quite smart to make a personal plan to make sure that the account is kept in good standing.