Personal Loans vs. Credit Cards: Which Is Better for Debt Consolidation?
Comparing personal loans and credit cards can help you choose the most cost-effective way to consolidate high-interest debt.
How they compare
Comparing personal loans and credit cards can help you choose the most cost-effective way to consolidate high-interest debt. Personal loans give you a fixed monthly payment and a defined payoff date. Balance-transfer credit cards offer a promotional low or 0% APR window — typically 12 to 21 months.
When a personal loan wins
Choose a personal loan when your total balance is large enough that you can't realistically pay it off during a promotional window, or when you want the discipline of a fixed monthly payment and a clear end date.
When a balance-transfer card wins
A balance-transfer card can win for smaller balances you're confident you can pay off before the promo APR ends — and only if the transfer fee (typically 3–5%) doesn't wipe out the savings.
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