Is Credit Card Better than Personal Loan?

Is Credit Card Better than Personal Loan?

If you are a Filipino, is a credit card a better option than a personal loan? What are the advantages and disadvantages of each? To help you decide, we will show you some merits of having a credit card in your pocket, and also show the benefits of a personal loan.

How does a credit card work? It is a plastic card that has a magnetic strip. You can swipe this card to buy from a store or use it to buy goods online. To get a credit card, you need to apply for one. Each person who is approved has a maximum limit of money he can borrow, and he cannot decide how much this limit is.

How does a personal loan work? This is money you borrow as a one-time credit. In this case, you are asking a company to lend you money. Once you have received the money, you are expected to pay what you owe on a monthly basis. Personal loans have an interest, and the interest rate varies based on the amount you borrowed, plus the length of time it will take you to pay.

You can use the money to make purchases once it is transferred to either your bank account, check, or if you received it in cash. You can get personal loans in the Philippines from banks or from lending companies. To view or calculate these loan rates, you may visit UpFinance.

Advantages of a Credit Card

Here are the advantages of owning a credit card:

  • Mobile. You can buy online and offline.
  • Bonuses. Credit cards give you points for every peso you use. If you accumulate enough points, you can swap them for airplane tickets or goods and even gasoline.
  • Secure. Since you have a card instead of cash, losing the card does not mean you lose money; you can also file chargeback claims if a fraudulent transaction occurred.
  • No Collateral. You do not need to use a property for collateral when applying for a credit card; all you need is a good credit score.
  • Easy to Acquire. You can have your card in as short as a month, and you can also acquire higher credit limits if you are a good creditor.

Credit cards are great for small purchases here and there. They serve as great back-up if you do not want to bring cash with you, or if you run short of funds temporarily. You can also swipe them internationally, so you do not have to buy currencies if you are out of the country.

Advantages of Loaning for Personal Reasons

This acquisition of funds is best used for reasons beyond purchases. They are great for emergency, for building a business, house, or for refinancing other debts. Here are the advantages:

  • Affordable Rates. Banks and loan companies charge low fees for interest. You can pay as little as 2.1%. The interest rates get lower on a monthly basis if you choose a longer loan term or tenure.
  • Flexible Terms.You can choose how long you want to pay for what you own. With cards, you must pay on your due date.

There are many benefits to borrowing cash. Most the time, companies do not even need a collateral.


Before you make a choice, carefully assess how you intend to use the money. Use a card for buying goods. They are secure and you can use them anywhere. But for big expenses, you have to borrow cash; it is much more flexible in terms of payment structure and interest. You are also in control how long you want the term to be.