credit card or loan

metuka

I am a student in my last year of university and I need to borrow some money before I start working. I have already got a student loan but I need more to help me with rent etc..
Would it be better to get a credit card (I have an account with lloyds) or to get a loan?
realistically i would have to borrow about 2-3000 pounds - but I know I will be able to pay it back within a year.
- which is cheapest
- which is quickest to get
- which is less hassle
I am rubbish with finance issues and I need to borrow ASAP so I don't have time to look around - I have signed up for a lloyds platinum credit card which should be coming tomorrow but I am scared I have done the wrong thing....please Help!

pauli

I don't know what sort of credit limit you would get as a student, but if you can definitely guarantee paying it back in one year I would have thought a credit card with a 0% interest on new purchases card would be the best bet. There should be an article about this on the site under the credit cards section.

I think you only get a set amount of time that new purchases are 0% though, so if it was for rent you might have to pay a few months in one go, as if you start spending on the card once the 0% offer is up, the interest charges can get quite high as a lot of cards will keep charging you interest on those purchases until the balance of whatever you spent during the 0% period is paid off first.

metuka

thanks that is useful.
also what does minimum payment mean? - is it that every month I have to use my credit card to pay for something -at least the minimum amount set out by the terms of the credit card co. e.g. £5 a month? until I eventually cancel the card.

pauli

Minimum payment is the minimum amount you have to repay them every month, you're not obliged to spend anything on it at all if you don't want to.

Nornally the minimum payment is a percentage figure of the balance for example 2% with a flat rate minimum amount in £'s nornally about £5 (ie if you only owed £100 then the 2% minimum would only come to £2 so you would have to pay the £5)

Unless you have a 0% on purchases card though I would always try and pay off as much as you can each month as if you only pay the minimum it takes much longer to pay off and you get charged a lot more interest.