Are credit cards better than personal loans?

Most people are often confused about whether to avail a credit card or to apply for a personal loan. Let’s see some of their features and benefits to understand these financial products.

Advantages of using credit cards:

Reward points

Submit your credit card application once you reflect upon how you spend your money. This helps you to select a card depending upon your expenditure pattern. With some cards, you’ll get reward points if you frequently book flight tickets. Or, you can get bonuses for spending more on apparel stores with others. You can redeem those reward points to avail gift vouchers depending on the points you have collected.

Offers and discounts

Credit cards come with various exciting offers like free movie tickets. You can also avail attractive discounts on buying several products using your credit card.

Cashbacks

Using your credit cards to purchase products enables you to earn cashbacks. However, you don’t get the cash in hand here. Instead, the cashback amount is deducted in your credit bill.

The above points are the primary benefits of using credit cards. Hence, try to meet the credit card eligibility criteria to get your hands on the best credit card in the market. The documents you need to be eligible are age proof, address proof, and a photograph.

Now, let’s take a look at personal loans.

Advantages of availing personal loans:

Minimum documents

Just like as your credit card application, here too, you need minimal documents and fewer paperwork for processing of the loan application. Usually, it takes longer to sanction a personal loan than a credit card.

Easier repayments

The mode of payments here is more flexible as you can avail multiple methods to repay your dues.

Serves many purposes

You can use the cash for any purpose when you avail a personal loan. Use the fund for financing your education, wedding, medical emergencies and more.

As mentioned earlier, you don’t need any collateral to either avail credit cards or personal loans. That’s an advantage which applies to both these categories.

However, you won’t get any reward points, cashbacks or discounts when you avail a personal loan for purchasing products or travelling somewhere. These are some of the perks you only get when you use a credit card.

Many credit cards have additional benefits as well like free airport lounge access, interest-free cash withdrawals from ATMs, security features like ‘Zero-Fraud Liability Cover’ and more. In addition, the Bajaj Finserv RBL Bank SuperCard lets you buy products on easy EMIs with zero or nominal down payments and processing fees

Pre-approved offers minimise the time taken to avail a loan or another financial product. Simply provide a few basic details and check out your pre-approved offers instantly.

Hence, now you know whether meeting the credit card eligibility criteria is better for you or fulfilling the requirements for a personal loan. Accordingly, you can apply for one or the other.