Question about bank loan versus credit card

Just a quick question I was hoping for some advice with.

I need to take out a loan of about 1600 euro soon and I was wondering, if, rather than going to the bank for a loan and paying back interest on it whether it would be more worthwhile getting a credit card and making the purchase with that.

My logic was that with the credit card I could meet the monthly repayments and not incur interest charges as long as my payments were up to date.

Once the payments were completed, I could cancel the card perhaps.

There's pros and cons to both I suppose.

Would appreciate some advice on this? Thanks.

Hi Familyguy,

Are you sure you do not pay any interest charges if you meet the monthly payments with credit card debt? Doesn't sound right.

3CC

3CC said:

Hi Familyguy,

Are you sure you do not pay any interest charges if you meet the monthly payments with credit card debt? Doesn't sound right.

3CC

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Hi my understanding was that once you met the required repayment there was no interest incurred?

familyguy said:

My logic was that with the credit card I could meet the monthly repayments and not incur interest charges as long as my payments were up to date.

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If you'll end up paying zero interest then it is better of course. But if there is a chance you're not going to be able to repay the full amount on any particular month the interest rate on credit cards is penal.

You also have to factor in the annual credit card cost.

I presume you're going to make a purchase on the credit card and not a cash withdrawal of 1600 Euro?

Making the minimum payment or in fact any payment other than the full amount will not make it interest free, you will be charged interest on the outstanding balance, making the minimum payment just complies with the condition of having the card.

wbbs said:

Making the minimum payment or in fact any payment other than the full amount will not make it interest free, you will be charged interest on the outstanding balance, making the minimum payment just complies with the condition of having the card.

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I understand thanks.

So best option would probably be the bank loan with a fixed rate then I would take it?

wbbs said:

Making the minimum payment or in fact any payment other than the full amount will not make it interest free, you will be charged interest on the outstanding balance, making the minimum payment just complies with the condition of having the card.

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Don't know what I was thinking yesterday but I got it completely wrong. Must be because that's how I work with my credit card.

OP would have to pay off the full amount the first month.