Credit card or Credit

With the development of banking products, citizens have more and more ways to solve their financial problems. First of all, due to various lending options. In this regard, sooner or later the question arises – which is more profitable, a consumer loan or a credit card? Let’s consider this topic in more detail.

Credit card or consumer loan – which one to choose?

Before deciding what is better to take, cash on a consumer loan or funds from a credit card, you should understand the specifics of these products. They have similarities and differences. The common thing for a loan and a credit card is that in both cases money is borrowed from the bank for a certain period of time at interest. There are tariffs, contractual terms and penalties if they are not met. This is where the similarities end and the differences begin.

First of all, an ordinary loan differs from a credit card in the form of providing borrowed funds. The first option involves the issuance of a certain amount of cash on hand or crediting to the client’s bank account. You can withdraw money from it without commission. This method is most relevant for those who prefer to pay in bills and do not trust non-cash payments.

Unlike a consumer loan, a credit card is aimed specifically at non-cash transactions. In principle, it is also possible to withdraw cash from it, but this is unprofitable due to high commissions and the loss of the opportunity to use “grace” (a grace period in which interest is not charged).

Important point that distinguishes a credit card

Another important point that distinguishes a credit card from a cash loan is the principle of calculating interest and determining the amount of debt.

When registering a consumer loan, interest for attracting borrowed money is charged immediately, starting from the date of signing the agreement.

Spending money

In turn, the owner of the credit card does not become a debtor to the bank until he starts spending money. In addition, if the funds were spent and returned to the account during the grace period, interest will not be charged.

There is also a difference between a loan and a credit card in terms of renewing the limit. In the case of cash loans, every time you have to submit a new application to the bank for a loan. The cards are rechargeable, before the expiration of their validity, the limit can be renewed several times without unnecessary formalities, provided that there are no outstanding debts.

Pros and cons of consumer loans

Considering a credit card and a loan separately, each option has its own individual advantages and disadvantages. The main advantage of a consumer loan is the ability to immediately receive a fairly large amount, that can solve many financial problems.

Also, among the pluses, the following points can be noted:

1–>The loan is issued in full immediately upon signing the agreement;
2–>Borrower gets access to promotions that allow him to purchase goods and services at a large discount;
3–>Order to obtain a consumer loan, in most cases it is enough to provide a minimum package of documents (passport and certificate from the place of work);

4–>High competition between banks contributes to the systematic revision of the terms of granting loans in favor of the client.

The main disadvantages of consumer loans include:

•the presence of an interest rate, which ultimately leads to an overpayment;
•problems with taking out a loan by persons without official registration for work or receiving a “gray” salary;
•the presence of severe penalties for late payments, as well as in cases of impossibility of full repayment of the debt;
•long-term payments, which can lead to debt dependence if the borrower’s solvency decreases over time;
•age and other restrictions that prevent lending to certain groups of citizens.

Advantages and Disadvantages of Credit Cards

Like regular loans, credit cards are not ideal products. He has both strengths and weaknesses. The benefits include:

1 • the possibility of multiple use of the credit limit;
2 • availability of a grace period during which borrowed funds can be used free of charge;
3 • instant payment for any purchases in various ways (via terminals, mobile applications, on the Internet);
4 • the presence of a cashback, according to which you can return a part of the spent funds to the card;
5 • saving money due to additional discounts from the bank’s partners.

Credit cards have many advantages, but there are also disadvantages:

1 • rather high interest rates reduce the profitability of the product;
2 • paid annual service entails additional costs;
3 • a commission is charged for withdrawing cash from a credit card;
there is a risk of getting used to the use of borrowed funds, as a result of which debt obligations can greatly exceed the financial capabilities of the cardholder.

Which is easier to get?

In terms of affordability, a credit card has no significant advantages over a cash loan. To get it, you also need to meet certain criteria. So, the applicant must be an adult, have Russian citizenship, an official job and a proven income. The last indicator directly affects the size of the limit for both consumer loans and credit cards.

Some institutions can issue a loan within one day

As for the speed of registration, it depends on the specific bank. Some institutions can issue a loan within one day. While the preparation of the card in any case will take several days, although the account itself is opened almost instantly. You can make a request for a loan or credit card in any way: through a visit to the office or online. Today, each bank has its own official website.


Summing up, we can say that there is no definite answer to the question of which is better. A loan or a credit card. You should choose the product that best suits your specific goals and objectives. When assessing a particular proposal for benefits. It is worth weighing all the pros and cons, and also adequately determine your own financial capabilities. In order to avoid debt dependence on the creditor bank.