At the time of planning for the borrowed funds, most of the folks prefer to settle for the credit cards. At times, it might sound as an asset for people, but it is like that beautiful flower that hides the snake under its petals. Such is the case with credit cards. Credit cards give you the leverage to buy any product with just a swipe, glide or wave. But the asset becomes your greatest liability when you fail to pay on time. In case, you fail to pay on time, the rate of interest of the credit card is way higher than the personal loan interest.
At the same time, personal loan is something in which you can control your purchasing power with the exhaustion of the fund. But, in case of credit card, it is like a quick sand of debt, the more you try to come out of its, the more deeper you do. Credit card dramatically increases the purchasing power of the individuals, as a result, the bearer fails to understand that he/she is pulling him/her into the debt cycle. So, whenever you pay off the credit card due, you again get the same paid amount available for reuse for purchase, and the cycle goes on.
Hence, it is highly recommended that in case if you have been facing the financial difficulties, always go with personal loans as the rate of interest is lower than credit cards and it wouldn’t lead to unused purchases and pull you into a debt trap.
Banks are quite eager to give credit cards, and often the procedures are simpler and easier to follow, but the repercussions are grotesque and might put you into an embarrassing situation.