Credit Card or Loan

Lanarkshire71

Hi all. New to the forum and just looking for a bit of advice. I'm moving house soon and I'm buying some new appliances and furniture. I was going to take out a loan but the interest rates are higher than my credit card. I was going to put it all on my credit card which would take me to over 50% of my credit limit and pay it off over the same period (24 months) as the loan but would this have a more negative impact on my credit score than a loan even though the credit card is cheaper? Many thanks.

fatbelly

Can you get a 0% money transfer card or a 0% purchase card?

https://www.moneysavingexpert.com/credit-cards/best-0-credit-cards/

And pay back within the promotional period?

Brie

Your score is immaterial as you're the only one who sees it.  A bank or other potential creditor would look at your credit history instead.  As long as there are missed payments there should be non problem - particularly if you are paying more than the minimum every month.

CliveOfIndia

Lanarkshire71 said:

I was going to take out a loan but the interest rates are higher than my credit card.

Is your credit card on a promotional rate?  If not, the fact that you're being offered loans at a higher rate than most standard cards (which are pretty high in the first place) would tend to indicate that your credit history is less than ideal.  Or that your income is quite low in comparison to your outgoings.

As Fatbelly says, a 0% card might be a good option, if you can get one and if you can pay it off by the end of the promotional rate.  Or a more prudent alternative might be to make do with some second-hand furniture/appliances until you can save up to buy some new ones.

All that aside, ignore your meaningless score, as has already been mentioned.  A lender will be looking at your total debt, they pretty much don't care where it's sitting - whether on a card, a loan or wherever.

ManyWays

Not many credit cards have a low interest rate, if your card seems to have a rate of less than 3% that is probably the monthly rate not the annual rate.

Lanarkshire71

Thanks for the advice everyone. Much appreciated. I'll put it on the credit card 😀 My credit card is 10% Apr and the loans I was being offered were about 12%. I'll have a look for credit cards with 0% purchase offers 👍