• A personal loan might take time to build up credit in the payment history category.
• You are committed to making the monthly payment until the loan has been paid.
• If your credit is not good, rates can sometimes be as high or higher than credit card rates.
Visit our website to see the personal loan programs offered at 121FCU. With unsecured and secured products and loan amounts from $500 to $50,000.00, we have options to meet your needs. Our members enjoy fixed interest rates and low minimum payments on these loans.
What Is a Credit Card Loan?
Credit cards are attached to an open-end line of credit. This means that the loan remains open for as long as you and the lender choose, provided you follow account requirements such as making payments when required. This is also commonly called revolving debt. You can continue to borrow and repay money for as long as the account is in good standing and there is an available balance. When there is a balance on the loan, you make monthly payments until the balance is paid off.
Pros and Cons of Credit CardsPros
• Your credit card is tied to a revolving loan that remains open for as long as you need. You can pay any balance off and continue to use it indefinitely. Even if you don’t plan to use it right away you can keep it on hand just in case the need arises or an emergency occurs.
• You can select a credit card that earns rewards such as gift cards, merchandise, airline miles or cash back.
• You can get the benefits of a credit card without paying interest if you pay your balance off before the grace period ends.
• Credit cards can help build your credit score.
• Collateral is not required, so personal possessions are not at risk of loss.
• There are secured card options available to help people with no credit or bad credit help build up their credit score.
• There are credit card offers are available that offer an introductory rate of 0%. This is ideal if you have short-term debt.
• Some major card brands offer lesser-known benefits such as car rental insurance.