Credit card or personal loan to consolidate debt

Credit card or personal loan to consolidate debt

28 December 2007

In recent times, the advent of the balance transfer low interest credit card (in some cases zero percent for the life of your credit card debt) has seen credit cards compete with personal loans as a form of debt consolidation.

While personal loans for a new car are still the most popular form of credit for those who wish to purchase or upgrade their vehicle, the personal loan is coming underfire from credit cards as a means to consolidate debt.

A personal loan is still a more feasible long term option for those who wish to consolidate debt with, on average, a personal loan being charged at a lower rate of interest than a credit card.

You also don't have to worry about making any further purchases or indeed, being disciplined with your credit card so as not to negate any savings that a low interest balance transfer credit card has for your benefit by using it before your bill has been repaid.

A low interest credit card that you receive from another bank when you do a balance transfer will charge interest on any new purchases you make. You don't get a free period to make more purchases than what you have already transferred.

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