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Are loans better than credit cards?

Dec 26th, 2007 03:56
Peter Jonsson, David Sill, Joseph Martin, Mark Gomelli, Harsh, http://www.chiefcyberpicks.com http://www.onlinebingoreviewdirectory.com http://www.skillgamesdirectory.com


When it comes to borrowing money from financial institutions, loans 
and credit cards are the most common forms. Therefore, it is no 
surprise that people often consider which of the two is the better 
option.
No one solution can fit all; either can be a good option depending on 
how your situation fits into the following; 
1.The amount you need to borrow. 
2.Your circumstances. 
3.The level of flexibility you want to have. 
1. The amount you need.
 A loan allows you to borrow huge sums of money where as a credit card 
will only go as far as several thousands (although your credit limit 
can be increased over time).
With a loan you can get the cash in hand if you need it but with a 
credit card, you would be charged a cash advance fee if you were to 
withdraw cash.    
2. Your circumstances
If you have a bad credit rating, both loans and credit cards would 
have a high interest rate but the credit card would be easier to 
acquire, albeit starting at a low credit limit.
3. Flexibility
Some people may borrow money that they�re able to pay back within 
weeks, but then find that they have to borrow again later. 
If this is your situation, a credit card is the perfect option for 
you. Credit cards are flexible; you can pay them off anytime you have 
the money available. That money is again available for you to borrow. 
If you manage this well, you might get away with paying very little 
interest.
In Summary:
- Loans are better if you need large sums of money
- Loans attract a lower interest rate
- Credit cards are better if you just need to borrow to supplement 
your income.
- Credit cards are easier to get if you have a bad credit rating.
- Credit cards give you better flexibility.
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