Credit cards can be very useful in daily life and make borrowing (and spending) easy. However, they aren’t automatically the best option for borrowers – sometimes a personal loan can have the edge over plastic.
Personal loans are viewed more favourably when it comes to credit history, according to Credit.com’s Gerri Detweiler. Whilst using a large percentage of a credit card’s limit on a purchase is seen as detrimental to a credit rating, personal loans can help build a higher credit score by being classed as instalment credit.
A personal loan with a fixed rate means not having to worry about fluctuations in repayments. Credit card users can suffer when the base rate rises, meaning their tracked or variable rate can rise with it. Personal loans can be set for a fixed term, removing the temptation to increase a loan’s duration and spend more in the interim.
Source: http://money.msn.com/saving-money-tips/post.aspx?post=06b960ea-96c4-40be-bda0-39a7ed818cc9
