When you need some extra money and you have no savings account or someone you can borrow from private, there are really only two options: to use credit or to borrow money from a bank. It’s really the same thing, because credit simply means that you buy the product and pay later, usually with a installment plan. If you borrow money that is not to be used for something specified such as a home or a car, it is called a consumer loan. There are some occasions when it is better to trade through their credit card, but from time to time it is actually more beneficial with a consumer loan. In the rest of the text, we work out how it works.
- Through a credit card you can sometimes collect benefits
- On a consumer loan, interest is always added
- Many credit cards come with low amounts
The advantage of credit card
Managing your credit card correctly can be an excellent financial aid. When using their credit and paying it back in time, that is, before the due date on the invoice, you pay no interest on their purchase. This differs from a regular loan where you in principle always pay a certain interest on the loan amount. If you do not pay the credit card in time, however, it can be very expensive.
Credit cards can be smart if you always work according to the principle that you pay back the entire sum you borrow at, for example, the next payroll. The worst thing you can do is always pay the minimum amount on the invoice, because then you will only pay the interest in principle. Through the credit card you can often collect various benefits such as bonus points on food or travel. This is one of the reasons many people like this credit system. The disadvantage compared to other unsecured loans is precisely that the credit card’s upper limit can be quite low initially.
The advantage of consumer loans
If you have not built up a good credit rating, you can often only get a credit card with a very low credit. If you then need to borrow a little more money, say to a car or some other expensive item, it may not be possible to pay through the credit card. Then you can, for example, take a larger quick loan or small loan without UC .
Compared to regular bank loans, a quick loan can be a better choice if you do not want your loan application to affect your creditworthiness. This is because many loan companies do not charge a credit report through the Information Center. Just as with a credit card, it is only when the repayments become delayed that it becomes very expensive, but if you pay back in time you can get completely okay interest terms. A consumer loan is thus better if you have a large amount that you want to spend.
Credit cards or consumer loans? Your personal conditions determine.
Generally speaking, it is not meant to use larger sums using their credit card, but there are of course some cards that allow you to spend more. Then you can often pay the invoices and in this way it is more like a regular loan. As you can see, it can be both beneficial with a consumer loan and a credit card, it is simply an economic need that determines which one is best suited. Through our site you can compare different loans with each other to find one that suits you perfectly. Just fill in your details, how much and how long you want to borrow and then get a list of different loans that fit. Apply directly and receive a non-binding offer.