‘Tis the season to spend money, fa la la la la, la la la la! And just how much money? According to Statista, the average American in 2018 will spend $794.00 on Christmas presents. And that number doesn’t cover expenses for holiday dinners, decorations, Christmas cards or travel expenses. So how do we afford the cost of the holidays, especially when a Christmas Bonus may not be in the cards? According to a CreditDonkey report, 37% of all holiday spending in 2014 was put on credit cards. This number is expected to reach over 45% this year.
In effect, a credit card is a kind of personal loan. The credit card company advances you cash that you can pay back at the end of the month or over time, in exchange for a substantial interest rate. Credit cards, like a personal loan, can be used for practically any expense, be it a medical cost, personal emergency, or even to buy gifts for the holidays.
So, yes indeed, people do use personal loans to buy holiday gifts. In fact, Credit Direct supplies personal loans specifically for people who need a little financial help during the holidays. If you compare using a credit card versus getting a personal loan, you’ll find that a personal loan actually has more advantages.
Fixed Loan Amounts = Peace of Mind
The biggest difference between a personal loan and a credit card that makes a personal loan more appealing for buying gifts: it is not a revolving line of credit. As you pay off a credit card, you have access to the funds you put back, which can put you in a never-ending cycle of interest payments. A personal loan provides you a flat sum of money, so the temptation to spend the money you pay back isn’t an option.
In addition, unlike credit cards, a personal loan has a fixed period of repayment and a fixed monthly payment. Better still, your interest rate cannot change during the period of repayment, whereas credit cards can increase your interest rate every year. These features allow you to plan your monthly budget better. You always know what your payment amount is going to be, and when the loan will be repaid in full.
It’s also easier to obtain a personal loan than a credit card. Qualifying for a personal loan isn’t typically based on your credit score, but rather your ability to repay the loan. The application for the loan is short and simple, and often results in an improvement to your credit score, rather than putting your credit score in jeopardy by going over your credit limit.
If you’ve been thinking about a personal loan to help with Holiday expenses, call Credit Direct today. It’s not too late! Applications can be approved the same day, and funds can be in your bank account within 48 hours. Apply online for an immediate response at www.creditdirect.com.