Let’s talk about the differences between personal loans and credit cards. You can probably tell from our other articles that we prefer the former, but it’s worth the time to highlight the strengths and weaknesses of each. Financial education can help you become a more prudent borrower and use credit to bolster your finances rather than allow it to get out of control.
Personal Loans and Credit Cards – What’s the Difference?
Personal loans and credit cards give you the opportunity to borrow money with the intention of paying it back later with interest and fees. Personal loans may have higher loan amounts with longer repayment terms, whereas credit cards have minimum payments every month. Credit cards usually have variable rates, which is not the case with personal loans at Cash Link USA.
Both carry significant fees if you’re late on a payment, but credit cards inflict additional fees for foreign transactions, annual fees, and over-limit fees. Personal loans will come as a lump sum of cash, while you can get credit cards as a revolving line of credit (more on that below).
Why are Personal Loans Better?
These are the most important advantages to borrowing a personal loan rather than collecting more and more credit cards.
- Personal loans are far superior to credit cards if your goal is to consolidate your debt. In fact, most of the debt consolidation that Americans do involves mopping up the mess that comes from credit cards.
- The repayment system allows enough flexibility without trapping you in heavy interest accumulation.
- You can use personal loans to handle a variety of big expenses such as wedding parties, home improvement, automotive repairs, or doctor bills.
- It’s just as easy if not faster to get a personal loan through our fast and secure online application system.
- Personal loans are a legitimate financial tool to solve particular problems, whereas credit cards often reinforce chronic indebtedness.
- They’re also a safer way to either establish a good credit score, or to fix a damaged credit score brought about by problems with credit cards.
Another Smart Credit Card Alternative
Personal loans aren’t the only way we help borrowers access fast cash. You can also take out a personal line of credit as a smart alternative to credit cards. This is the ideal way to approach a project or business endeavor you know will require funding for a few months, when you don’t have enough cash flow yet.
Credit lines won’t let you extend your limit all the time, and you can probably get one with a better interest rate (pending your credit condition). Most credit card companies have no qualms about trapping you in a debt cycle or hooking you with variable teaser rates. Personal credit lines involve a structured withdrawal and repayment program without all the hidden fees, gimmicks, and confusion.
Cash Link USA: The Best Source for Fast Online Loans
Does this entice you to try something else over the same credit-card grind? Well, you’re not alone because thousands of our clients agree and prefer the flexibility, security, and fixed rate solution you get with personal loans. This is one of the smartest ways to consolidate and eliminate all the debt service payments once and for all.
Cash Link USA receives top accolades from multiple third-party watchdog groups. The online business reviewer, BloggerLocal, rates us as one of the top companies for personal loans. We also abide by all state lending regulations along with the best practices of the Online Lending Alliance (OLA).
We hope you enjoyed this post on personal loans and credit cards, and will contact us the next time you want to borrow an online cash loan.