A credit card in blue with a $0 balance

Holiday Gift Shopping: Credit Cards or Personal Loan?

Milad Hassibi November 21, 2018


With the days getting colder and the nights a little longer, many Americans are excited about the upcoming holiday season. Although the holidays are a renowned time for connecting with friends and family, they are also one of the most expensive times of the year.

Many consumers find themselves in a financial bind when the holiday season arrives. The National Retail Federation stated that Americans spent over $650 billion over the holidays in 2016. This is a four percent increase from the year prior.

To fund the gift giving sensation, many consumers find themselves in a position where they are a man received a personal loan origination feeforced to place purchases on high-interest credit cards.

Rather than paying an astronomical rate on a high-interest credit card, some consumers choose to use a personal loan to fund their holiday purchases.

Credit Cards vs Personal Loan for Holiday Shopping

Using a credit card during the holiday season does have its advantages and disadvantages:

  • You can earn points and cash back on almost any holiday purchase
  • You could open a new credit card and get a 0% APR interest rate
  • Some credit cards may offer you pricing protection and even additional warranties
  • Credit cards carry higher interest rates, especially for those with bad credit

A personal loan can offer many benefits, but it also has its drawbacks:

  • A personal loan gives you a lump sum up front, so it is easier to keep track of where you spent your money
  • A personal loan usually does not come with 0% APR, but many personal loans offer interest rates far lower than the average rate on a credit card.
  • A personal loan allows you to repay a set amount back each month. You will know how much you have to pay your loan provider back.
  • Personal loans have an “Origination Fee”, which is roughly 3-5% of the loan value

Credit Cards and Personal Loans for Shopping

Although a personal loan or credit card can help get you over the holiday spending bump, it can also end up becoming a burden later on. Once the holiday season is over, you will be required to repay each cent of that debt, along with the corresponding interest.

Get a Car Loan with Any Credit Along with a Happy Couple and a New Black SUV next to them

If you have a larger than usual list of gifts you are looking to buy, try lowering your budget per person to be at levels you can afford to pay without using a credit card or taking out a loan.

Final Note

A personal loan can be a great tool for getting the funds you need to cover your holiday expenses. If you are looking to get a personal loan, CrediReady can help.

Our nationwide network of trusted and verified lenders work with borrowers in all credit situations. Take a moment to fill out our free no-obligation loan inquiry form and get the money you need today!



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