The first thing that comes to one’s mind when you need money for a sudden expenditure or settles a debt is to borrow the required cash. There are many ways and means accessible to overcome this issue and the answer for most people is resorting to a personal loan or a credit card.
Both personal loan and credit card offer a fast inflow of cash, but the pros and cons should be considered for each of these options.
When to Choose a Credit Card
When choosing a credit card whether it is for the first time or upgrading your current card, a complete research is very important.
A credit card comes in handy when it is necessary to take advantage of store discounts, book a cab, hotel, restaurant, airline travel and cash back rewards on points earned.
In a nutshell, it simplifies a person’s life, provided the full amount is settled before the due date.
Credit Card Benefits
Benefits of a credit card are numerous. If a credit card is used smartly it is helpful when managing crisis situations or sudden expenses, buying on credit.
A credit card offering rewards gives the cardholder an opportunity to win prizes for making purchases. Rewards differ according to card type and come in the mode of cash back, discounts on fuel, groceries, and airfare etc.
Most credit cards offer great discounts on dining and lodging. Vacationing with family at a nominal fee is one of the best benefits.
Some credit card providers contact the customer if a suspicious transaction is being done such as overseas purchases and the transaction is stopped on time. Risk of thieves gaining access to money in these accounts is less since a credit card is not linked to a checking or savings account.
When an online loan works better
Getting an online loan works better because it is approved faster, lower interest rates and usually not necessary to produce a guarantor to get approval. However, it is advisable to look around and stay with well-known lenders to avoid trouble. Banks are also good at providing these services and assist in saving time.
Personal Loan Benefits
A personal loan can be obtained to fund any personal expenses and the borrower can utilize the money for any purpose. It does not require to provide any security to the lender. However, the amount required should match with your payment ability to settling the loan
Personal cash loan vs. Credit card
Personal cash loans are generally easy to obtain and settled by monthly installments whilst a credit card gives instant cash to be settled within the credit period and if unsettled a high interest accumulated monthly increasing the credit amount.