Credit line

A credit line is a lending arrangement in which a seller gives a customer a certain amount of available credit. A credit line is typically made available by sellers in order to give customers an inducement to make additional purchases beyond what they might have made if payment terms had been for cash only. Credit lines are commonly used to provide a competitive advantage over other firms that are not willing to risk payment defaults by their customers. In the banking world, a credit line is known as a line of credit.