• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • HOME
  • RECOMMENDED BOOKS
  • FREE TOOLS
  • CONTACT US
  • ABOUT

The Fortunate Investor

Investing, Business & Personal Finance For Wealth Builders

  • Save Money
  • Invest Your Money
  • Get Out of Debt
  • Making Money Online
  • Family & Money
  • Taxes
  • Business
  • Retirement
    • Retirement Calculator
Home » Is a Personal Loan Better Than a Credit Card?

Is a Personal Loan Better Than a Credit Card?

July 3, 2020 By The Fortunate Investor | This article may contain affiliate links. For more information visit our Disclosure

Tweet
Share
Pin
Share
Share

Is a Personal Loan Better Than a Credit Card?You never know when a financial emergency might happen, and around 40% of American adults don’t have an emergency fund saved.

Even if you’ve been working hard to build your savings, you might not have enough to cover everything. This might leave you trying to decide between personal loans vs credit cards.

Keep reading to learn more about the pros and cons of each and which might be the best option for you.

Personal Loan

A personal loan is ideal for situations that involve a considerable expense that you will need a lot of time to pay off. They usually have a lower interest rate than a credit card, but it depends on your credit score. Personal loans are also good if you have trouble controlling your spending because they don’t allow you to borrow more money than the original amount agreed upon.

Personal loans will help you build credit as long as you make your required payment on time each month. They also have a fixed rate, which means you won’t have to worry about your payments fluctuating over the loan duration.

The downside to personal loans is you have a set amount of time to pay them off, generally around 36 months. This means your monthly payments will be higher than with a credit card. You also won’t be able to immediately access the funds since you have to apply and then wait for approval before getting the money.

Credit Cards

Credit Cards

Credit cards have the advantage over a personal loan if you already have the card and need access to funds immediately. If you don’t already have a credit card, applying for one is simpler than ever online. The downside is that you’ll still have to wait for your card in the mail before you can use it.

Many credit card companies have great introduction deals such as 0% interest periods on new purchases or balance transfers. If you pay attention, you can pay your balance off before the introductory rate expires and avoid paying interest altogether.

If you have bad credit, you might not qualify for a personal loan, but you might get approved for a secured credit card. This is only helpful if the amount of money you need justifies the cash deposit that you will need to use as collateral.

Using a credit card during a financial emergency might not help you if you need cash. Most credit cards have a cash advance limit and have expensive fees as well. Also, if you have a problem with overspending, a credit card might keep you in a cycle of debt, making it hard to reach any goals you have for building your savings.

You can reach out for some expert advice if you are still unsure which option is best.

Learn More About Personal Loans vs Credit Cards Today

It might be tricky deciding between personal loans vs credit cards, but the decision comes down to your personal situation, how much money you need, and how quickly.

For more financial information, be sure to visit our website daily!

  • About
  • Latest Posts
The Fortunate Investor
The Fortunate Investor at FortunateInvestor.com
The Fortunate Investor is the finance half of the husband and wife duo behind this website. Michael's finance and investment advice is rooted in an MBA and 20 years experience as an entrepreneur, banker, and manager in the financial services industry.
Latest posts by The Fortunate Investor (see all)
  • Should You Hire a Dog Walker? - May 17, 2022
  • What You Should Known Before Starting Your Investment Process - May 16, 2022
  • The Brief Guide That Makes Switching Banks a Simple Process - May 16, 2022

Primary Sidebar

Popular Articles

Stop Making These Organic Optimization Mistakes

Stop Making These Organic Optimization Mistakes

Organic traffic is one of the most valuable types of traffic a business can receive, accounting for … Read More about Stop Making These Organic Optimization Mistakes

Get Into the Wood Industry Insider Tips for Success

Get Into the Wood Industry: Insider Tips for Success

The wood industry is a multi-billion dollar market that is always in demand. Furniture, … Read More about Get Into the Wood Industry: Insider Tips for Success

4 Powerful Ways to Support Your Company Branding Efforts

4 Powerful Ways to Support Your Company Branding Efforts

As an organization grows and its brand becomes more recognized in the marketplace, it is important … Read More about 4 Powerful Ways to Support Your Company Branding Efforts

What Buyers Look For In A Prospective Property

What Buyers Look For In A Prospective Property

If you’re about to put a house on the market, whether lived in or a simple investment property, … Read More about What Buyers Look For In A Prospective Property

Should You Hire a Dog Walker?

Should You Hire a Dog Walker?

If you're among the roughly 38% of Americans owning a dog, you might need some help with the … Read More about Should You Hire a Dog Walker?

Footer

TOPICS

SAVE MONEY
INVEST MONEY
REDUCE DEBT
MAKE MONEY
FAMILY & MONEY
TAXES
START A BUSINESS
RETIREMENT

THE FORTUNATE INVESTOR

ABOUT US
ADVERTISE
CONTACT US

The Fortunate Investor focuses on personal finance topics to build wealth. Topics include saving money, investing, managing debt, family and money, taxes, making money, college planning, starting a business, coupons and retirement.

SOCIAL MEDIA

FACEBOOK
TWITTER
PINTEREST
INSTAGRAM
YOUTUBE

Copyright © 2022 Fortunate Investor. All Rights Reserved. | Disclaimer & Disclosure | Privacy Policy | Terms of Service