Credit card or loan? Which is easier to get?

M

moneybaby

Guest
Hi,

I need about €3000 in cash for an emergency. My credit rating is okay but not perfect. I don't want to damage it further by being turned down for credit. Which am I more likely to get- a credit card or a loan? i.e. which do banks prefer giving? Thanks!
 
Hi moneybaby

Most lending institutions are interested in the ability of the person to repay the loan. If you can satisfy them that you can service the debt on the loan, you should not have a problem from them.

In general, credit card loans are expensive and in you circumstances where your credit rating is "okay" you might be better advised to steer away from them until your finances are on a sounder footing.

Marion :hat
 
Credit Cards get a bad rap, and for a once off situation like you describe you might be better off with a loan.

The upside to credit cards don't often get mentioned. I'll ignore the obvious upside of paying off each month and having access to basically free credit.

1. Once you have a credit card you are carrying in your pocket a pre-approved loan up to the credit limit. This has it's own dangers but the ability to get at that much credit without needing approval etc. is very valuable.

2. You can increase, decrease, or make lump sum repayments as you see fit. No need to get approval.

There are lots more benefits also.

Yes the APR can be high, but unless you really are permanently at your credit limit and constantly carrying a very high balance then it works out quite reasonable for the flexability it provides.

Personal loans are not exactly stunning value. You sometimes hear people getting caught up about 1% or 2% APR on quite small balances. they might only be saving a few quid a year. they could probably save more by shopping around when buying the things they buy on credit.

Anyway, back to your point....A loan is probably best, but if you think you can clear this in a few months, and you think you can handle the discipline needed for a Card, then I think a Credit Card shouldn't be discounted on the basis of being more expensive.

Whichever you get, say NO to payment protection.

-Rd
 
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