Credit cards can sometimes be a lot cheaper, more secure and easier than personal loans. Credit card and unsecured loans are two of the most common ways of borrowing money.

If you have to rush for unsecured credit to meet an imminent expense, you are likely to turn to credit cards. However, another available option is available, the personal loan.

Personal loans are different to credit cards, because the former offers you a revolving line of credit whereas the latter comes with a maximum credit limit.

Since personal loans are unsecured, the bank or lender can’t repossess your property, i.e. your home or your car. If you want to pay out a one-time expense that you cannot afford, a personal loan may easily offer you a more competitive and manageable interest rate than the regular rate on your existing credit card.

Conversely, when you go for a personal loan, you will have a chance to choose your monthly payment and the loan repayment period. The good thing with a loan is that you are aware you will be progressing in paying off your loan every month because you have a fixed monthly repayment and no option to make a ‘minimum repayment’.

With credit cards, it may be more tempting to get out of paying back large sums of cash by just repaying the minimum repayment, which will hinder you from clearing your balance and will cost you far more in interest over the term of the loan.

If your expected expense is small and you feel you can pay it off quickly, a credit card would probably be better than a loan, especially if it is offering a low or 0% intro APR on purchases.

Another main advantage of credit cards is that they usually provide excellent short term incentives. 0% credit cards are widespread and offer better value than any lowest interest loan. Even if 0% credit cards offer a short introductory 0% rate, loan rates will unlikely be able to compete.

Loans are never better than 0% credit card. When looking for short term borrowing, that is, a week or even one month, paying a small fee for the credit card interest (if you can’t get a 0% offer) over the one month will likely be better than signing up to a personal loan for a year or even more. You will automatically pay less.

If you compare personal loans to 0% credit cards, there are lower monthly repayments when you use credit cards. Personal loans require you to make the same monthly repayment for the term of the loan, but credit cards offer you the freedom and flexibility to make smaller repayments as you wish, so long as it meets the minimum repayment.