Credit card vs personal loan: Which should you use? – CNBC

If you need to finance everyday expenses, or even pay off debt, leaning on either a credit card or personal loan could help.

However, each product has unique features that could make it more beneficial, depending on what your specific goals are. Both credit cards and personal loans provide borrowers with access to money that can pay for major costs like home renovations or new fitness equipment (Peloton, anyone?), but they work a bit differently.

For starters, credit cards are revolving credit that can be used repeatedly, while personal loans are installment credit that can only be used once. The credit requirements are typically the same for either product, with lenders making different options available for consumers with bad, fair/average, good and excellent credit.

That said, you may want to stick to a credit card over a personal loan (or vice versa), depending on what you need money for. Ahead, we break down the basics of credit cards vs. personal loans, then help you decide when you should use one over the other.

Quick facts: Credit card vs personal loan

Credit card Personal loan
How you use them Buy now; pay later Buy now; pay later
How they work Receive a revolving credit limit Receive a one-time payment of cash
APR Interest rate can vary or remain
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