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Credit Cards Vs Personal Loans: When To Use Which And Why

Credit Cards Vs Personal Loans

What is your go-to strategy when you need credit at any point in time in your life? You may either require a credit card or apply for a personal loan with a bank or a lender. These two options can be assessed separately and you can make the most of these two options available in the market with proper research and strategy.

What are credit cards and personal loans?

Credit Cards

Personal Loans

When to Use Personal Loans and When to Use Credit Cards

Here is a table showing a comparison for both

Credit Cards
Based on the concept of revolving creditCan be secured or unsecuredRewards are offered on cardsComes with an introductory offerNo interest if full balance is paid every monthThe interest rates are higher than personal loansIt comes with a clause which can cause the borrower to be in debt forever if the credit limit is exceeded every time
Personal Loans
Based on the concept of repayment in installmentsCan be secured or unsecuredThe repayment schedule is also fixedCan be offered at lower interest rates than credit cards

Key Takeaways


There is no thumb rule as to when what type of credit facility should be used by the borrower. The borrower can solely make a choice depending upon the need and the credit availing capability of the borrower. Credit cards and personal loans both have their own pluses and losses and they can be assessed depending on different situations. The borrower can avail of a loan with the same ease nowadays as that of a credit card. The borrower will always have an option to reap the maximum benefits provided by both these instruments in any situation.

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