[sulam]

In addition to the other explanations it might be interesting to know that high net worth individuals tend to make heavy use of these. They have extensive collateral that is often less than fully liquid. They can borrow a relatively small amount compared to their holdings and fund most of their day to day costs from their line of credit. Paying down the line can be done in a tax advantaged way. The math works out that they may pay low or even no taxes as a result.