Credit cards have trebled in popularity over the past decade with a third of spending being used on them. They are chosen because of their pure convenience and most people today have at least one credit card to their name.

However, whilst they can be extremely convenient to use, often they cause a massive amount of debt. So if you are not careful, convenience can cause you to really struggle, especially with credit cards that charge ridiculously high interest rates. So what are the alternatives? Well an unsecured loan is often a good option.

The Differences between Unsecured Loans and Credit Cards

Unsecured loans may not be exactly like credit cards, but they still allow you to have the money that you need. You can apply for a certain amount of money, usually up to $25,000 with an unsecured loan and you can generally use them for any purpose. It could be that you need new furniture or a new car. Or perhaps you just want to treat yourself? Whatever you want the money for you can have it.

Now you could argue that credit cards give you the money you need whenever you need it, but unsecured loans give you a one off payment. This is true, but if you do not really need to spend then why bother? Unsecured loans give you a set amount of money and you can use that for whatever you like. So if you do want to treat yourself, why not apply for a small unsecured loan and then say ‘right I will stick to this budget and I can get whatever I like with it’ then once it is gone, it is gone. You will have treated yourself and got whatever you need and then you can pay it back. With credit cards you just carry on spending getting into more and more debt and that is where the real problem starts.

Another advantage of an unsecured loan is that the interest rates are usually far lower than credit cards. So for the same amount of money that you would spend on your credit card, you will have to pay less back with an unsecured loan. This saves you money and still allows you to get what you need.

Now that isn’t to say that unsecured loans do not have their downsides. Of course they do. However, when compared to credit cards and the likelihood of you getting into debt, an unsecured loan is often a lot better to have than a credit card. So if you have never thought of switching your credit card for an unsecured loan then it may well be worth considering now. You never know, it just might save you a lot of financial hardship!