Credit Card is all the rage now, most of the websites prefers online purchasing through credit card only. So it is become a necessary for the people to have an at least one credit card for purchasing something online. As I spoken in earlier article credit card should use only for the small purchasing not for big purchasing. If you are using for big purchasing then it can make a little problem for you if you won’t able to repayment the amount. Credit Card companies are charging the 3.5 to 4 % interest rate per month on the dues amount after 45-52 days that is 42 to 48 % annually a huge interest rate in comparison of personal loan that is 14 to16 % annually. If you are not able to pay the credit card amount, immediately go for the personal loan and repay the whole amount of your credit card then you can save the interest rate which is applying regularly on your card.
When Personal Loan is better :-
A personal loan should take only for huge amount (40,000 INR to 60,000 INR) as per your needs. You can also take personal loan to avoid a huge interest rate on your credit card.
Big Difference in Credit Card and Personal Loan :-
1. Credit Card charges 42 % interest annually and personal charges 16 % annually.
2. Credit card better for only small purchases, personal loan can be taken for big purchase.
3. You can deposit the top up amount in the credit card but you can not make top up amount for the personal loan.
4. You can repay all the dues as soon as possible for the credit card, in case of loan you have to go with the tenure period and all the EMI’s.
5. If you not made regular payments then card will blocked after 3 months, in the loan bounce check charges would be applicable. But you can become defaulter in both cases if not paid.
6. If huge dues amount then difficult to pay credit card, but possible to pay it by personal loan.
7. Credit Card can stop your savings but personal loan not.
I would take more technical and hidden things on the credit card in the next posts.