Credit Card or Personal Loans—The Option that Works Best for You

March 05, 2020

You won’t need money only when you’re living in the boondocks where all your necessities are provided by the things that surround you, which you helped cultivate. Even then, when farming equipment becomes a pressing need, you will still need cash. If you’re short of that, should you get a personal loan or purchase your needs with a credit card? It’s hard to tell these financial options apart, much more their advantages and disadvantages.

This is what the article is about—to guide you and help you choose the right financial option.

Personal Loan: What it is

A personal loan is a cash lump sum that you, the borrower, can borrow and repay with interest in equal instalment methods in a period of two to five years. The interest rate for personal loans is usually at 12.9 per cent to 27.25 per cent, and you can borrow as much as R250,000. 

Personal loans are ideal if you need to finance a considerable expense, such as farm equipment or barn house fixtures. Personal loans are a more structured form of money borrowing because the monthly payment is affordable.

The Best Part Is…

With personal loans, you can choose the amount you want to borrow for the lowest interest rate or the monthly instalment that works for you. The best possible offers will be based on your profile and your needs. Another benefit you can enjoy when taking out personal loans is that once the loan is approved, you can have the money straight away.


If you aren’t able to pay on time, there will be an accumulating penalty fee that you have to face. Unless you’ve taken out a loan for an income-generating expense, paying it out would be difficult. 

The mentality about taking out loans is that you don’t have the money at the moment to pay for what you want or need. If you’ve invested that loan so that it will multiply by two or three times in a month, you’ll be able to pay the monthly instalment plus interest. If you didn’t because you rely on your monthly wages, you would truly have a hard time paying off a personal loan. We’re not saying you won’t be able to pay the loan though.

Credit Card: What it is

Paying services and products using credit cards is still one of the most convenient ways to transact. It can help you establish an excellent credit score, which will benefit you in the long run. If you use a credit card wisely by turning it into your payment tool instead of a debt instrument, you won’t be in debt forever.

The Best Part Is…

Buying an item that you can’t afford at the moment using your credit card is prudent. There is a caveat, however. It’s only prudent if the repayment time frame is short. For example, you want to purchase a Christian Louboutin high-heeled boots for R1,500, but you don’t have the cash to pay for it right away. If you buy it with your credit card with an 18 per cent interest rate and pay it off within four months, you will only pay an extra R57. That’s a good buy.


Cash is king in Africa. Nine out of ten business transactions that involve money is paid in cash. That’s because most of the population has a massive distrust in credit card technology, wherein the majority are fraudulent. 


Both personal loans and credit cards are good for you if you’ll be able to pay on time. If not, any delay will put you in a bad debt that will be detrimental to your credit score and your life. The key to choosing personal loans or credit cards is using the right company. There are several financial companies in Africa that are going to have your back when it comes to your financial needs. 

If you’re looking for quick loans in South Africa, get in touch with us to see how we can help.