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Considering a Loan Instead of Credit Cards for Holiday Shopping

It seems like the holiday season slips up quickly. The dates never change, but suddenly many people find themselves with a long list of Christmas presents to purchase without the short-term budget to go along with it. This is when many people turn to their credit cards to help cover the costs. Then, some turn to a short term cash advance. While credit cards and loans are both popular, they are not created equal. This especially applies when looking in the terms of the overall cost. This is why many financial advisers typically recommend a loan instead of credit cards. Here is more detail on the reasons why:

Interest Rates

One of the biggest differences between personal loans and credit cards is the average interest rate. Credit cards are simply a revolving line of credit designed for small purchases that will be paid off easily within a month or two. Many people use them for their groceries, gas, and household supplies.

Since credit card companies anticipate that individuals will pay their balances off quickly, this usually translates to a higher interest rate. This means the user ends up spending more money in the long run.

Lower Rates

When looking at a loan, they are installment-based with fixed amounts. Due to this, lenders will normally offer a lower rate. This type of arrangement is beneficial to the borrower in a couple of ways. First, the borrower avoids having to watch the initial amount of the purchase grow substantially as a result of high interest. This helps to reduce the long-term costs associated with the purchases. Second, there isn’t the added pressure to have the balance paid off in January and put an additional strain on the family's budget. This isn’t the way to start out the new year.

While there is no need to drag out the repayment process for too long, a loan has established terms that families can budget around in the months to come. They are very predictable and clear-cut when the loan is obtained.

Quick Access

A huge advantage of a loan is quick access. When applying for a credit card, there is the application process, the approval process, and then waiting for the actual card to arrive in the mail to start shopping. Those who have already put off shopping until the last week before Christmas find this to be stressful. When it comes to a loan, the complete process can be handled efficiently and most have their funds by the next business morning.

When you visit cigno Loans you will find the application and more details about their programs. The process can be handled within a matter of hours rather than days.

With the holidays fast approaching, avoid some of the financial stress by visiting cignoloans. Whether looking at payday loans or short-term loans, they are your go-to company for financial needs.