As you already know today’s generation is much smarter than the older one, whether it comes to a credit card or personal loan. They are totally aware of the advancement of technology, luxury, and a palette of options available, the younger generation is naturally practical. They need not take extra effort to a practical approach.
- Youngsters in their 20s who are fresh out of college and working in jobs that they were studying for all their life, often find themselves in a peculiar situation.
- They want to invest or buy something big, a thing that they always thought they would buy after they began their first job.
- It may be a bike for brother, or a holiday trip for their parents, and expensive mobile for their sister, or anything else. Find alternatives to personal loans.
- Now that these youngsters have a stable income, they want to figure out if they should go for a personal loan or get a credit card. These options muddle them and they seek advice. For starters, youngsters should know the difference between a personal loan and a credit card.
Fees and Costs
- Between personal loans and credit cards, there are several fees and upfront costs that should be weighed in to get the best value.
- Where most personal loans charge a personal loan-application fee, it is easy to find credit card options that don’t, but this doesn’t necessarily mean better value in the long run.
Big Spending vs. Small Spending
- Credit cards have something called ‘revolving credit’ this means that you’re given a spending limit. You can easily spend up to that amount given that you repay the debt along with a small interest rate.
- Credit cards are useful for small purchases.
- Personal loans, on the other hand, are great for big purchases.
- They act as a line of credit that is paid back during regular intervals in a fixed period of time.
- You can apply for a personal loan to borrow large amounts from the desired lender.
- To check the rate of interest on the personal loan as it varies from bank to bank.
Check for eligibility
- After arriving at a decision, do check for eligibility for a personal loan. If you’ve decided to apply for a credit card then thoroughly check the terms and conditions.
- There are several credit cards available and each has its own set of benefits. Also, you will need to match the credit card eligibility criteria to get your desired card. The same goes for Personal loans.