# What does it mean to "open a line of credit" for someone? **URL:** \ **Category:** Factual Questions\ **Created:** [May 12, 2015, 1:46am UTC](https://boards.straightdope.com/t/what-does-it-mean-to-open-a-line-of-credit-for-someone/719828 "2015-05-12T01:46:25Z")\ **Posts on this page:** 8\ **Page:** 1
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [May 12, 2015, 1:46am UTC](https://boards.straightdope.com/t/what-does-it-mean-to-open-a-line-of-credit-for-someone/719828/1 "2015-05-12T01:46:25Z")
If someone tells me that they’ve “opened a line of credit” for me, what does that mean exactly? Are they giving me free money? Or an automatic loan? Can I only access it at one bank? Can I just walk in, show my ID and walk out with the cash? If it is a loan, what are the repayment terms? Thanks. ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [May 12, 2015, 1:50am UTC](https://boards.straightdope.com/t/what-does-it-mean-to-open-a-line-of-credit-for-someone/719828/2 "2015-05-12T01:50:56Z")
> **[How Lines of Credit Work](https://money.howstuffworks.com/personal-finance/banking/lines-of-credit.htm)** > > A line of credit can help cover large, unexpected expenses like surgery fees that your medical insurance doesn't cover. With this type of loan, you don't start repayments until you borrow the funds. ---
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [May 12, 2015, 5:44am UTC](https://boards.straightdope.com/t/what-does-it-mean-to-open-a-line-of-credit-for-someone/719828/3 "2015-05-12T05:44:16Z")
> [@Duckster](#): > > [How Lines of Credit Work | HowStuffWorks](http://money.howstuffworks.com/personal-finance/banking/lines-of-credit.htm) Thanks. I initially looked at wikipedia but it wasn’t much help. Your link was. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [May 12, 2015, 2:26pm UTC](https://boards.straightdope.com/t/what-does-it-mean-to-open-a-line-of-credit-for-someone/719828/4 "2015-05-12T14:26:55Z")
Hint: If you don’t know what it is, and they opened it for you without you asking for it explicitly then it’s a really, \*really \*bad deal. In other words, they’re the shark and you’re the lunch. ---
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [May 13, 2015, 12:40am UTC](https://boards.straightdope.com/t/what-does-it-mean-to-open-a-line-of-credit-for-someone/719828/5 "2015-05-13T00:40:51Z")
> [@LSLGuy](#): > > Hint: If you don’t know what it is, and they opened it for you without you asking for it explicitly then it’s a really, \*really \*bad deal. > > In other words, they’re the shark and you’re the lunch. The reason why I was asking is because a grandfather I know opened one for his granddaughter. His granddaughter didn’t know what it means so she asked me. I wasn’t 100% sure so I asked here. So you think the grandfather (a wealthy investment banker) is working against his granddaughter here? What does he hope to gain? (I think it was somehow implicit that grandfather would pay back any amount withdrawn, right?) ---
**Author:** ![Isilder](https://avatars.discourse-cdn.com/v4/letter/i/cc9497/32.png) [@Isilder](https://boards.straightdope.com/u/Isilder)\ **Post date:** [May 13, 2015, 12:53am UTC](https://boards.straightdope.com/t/what-does-it-mean-to-open-a-line-of-credit-for-someone/719828/6 "2015-05-13T00:53:57Z")
> [@Isamu](#): > > (I think it was somehow implicit that grandfather would pay back any amount withdrawn, right?) No, its explicit that its a loan to the granddaughter, and that the grandfather is guaranteeing it, they won’t give poor people loans unless someone with assets secures it … Well personal loans and credit cars charge a high interest rate and have obnoxious terms. For example, the credit card requires minimum payments in the next month, so what if you are an artist who is spending a year on creating a large project, so you won’t have income for a year ? Basically, with the security from the grandfather, the interest rate is lower than personal loans and credit cards. ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [May 13, 2015, 5:12pm UTC](https://boards.straightdope.com/t/what-does-it-mean-to-open-a-line-of-credit-for-someone/719828/7 "2015-05-13T17:12:01Z")
> [@Isamu](#): > > The reason why I was asking is because a grandfather I know opened one for his granddaughter. His granddaughter didn’t know what it means so she asked me. I wasn’t 100% sure so I asked here. Seems like the granddaughter should have asked PapPap what it meant, since it was him that opened it for her. Does she not have a relationship with her grandfather? ---
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [May 14, 2015, 10:19am UTC](https://boards.straightdope.com/t/what-does-it-mean-to-open-a-line-of-credit-for-someone/719828/8 "2015-05-14T10:19:17Z")
He can be a difficult man.