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Credit card or loan, which is cheaper?


“I need money: is it cheaper to take out a loan or a credit card?” It is a question that more people ask themselves than you can imagine, due to the fact that cash is not always available to meet all the payments that may arise. So below we will analyze the advantages and disadvantages of each of the options, so that you can choose the best financial product.

Credit card vs. loan: which option is cheaper?

Your washing machine breaks down and you have no money, what do you do? At that moment two options arise: buy it with your credit card and be charged for it the following month or take out a personal loan to get out of your financial predicament.

Which is better: applying for a credit card or a loan? It all depends on the specific needs of the individual.

Why choose a personal loan?

In a personal loan, a certain amount of money is requested, at a certain interest rate, and a term is set for repayment. From the moment of its application, every month we commit ourselves with the financial entity in question to pay the monthly installment, until returning the borrowed capital together with the interests.

It is a financial product designed for those who need an immediate amount of money, in order to face a series of payments, debts, purchases, whims?

Normally, the interest to be paid depends on the time it takes to pay it back. So, if you want to get it cheaper, the sooner the better.

Why take out a credit card?

The alternative to the personal loan is the credit card. And in the case of a one-time expense due to an unexpected purchase, the card is the best possible solution, since it allows you to make purchases and pay for them a month later with total peace of mind and comfort.

The credit card has an annual cost that varies depending on the financial institution where it is requested. Normally, it is around 40 euros per year.

So… Which option is cheaper?

It all depends on the interest rate. In the case of credit cards, the rate is usually fixed and you have to add the annual cost. However, in the case of loans you have to consult the APR rate, which depends entirely on the finance company.


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