Unsecured loans versus credit cards

At a time when people are finding it hard to honour their repayment commitments, wouldn’t it be wise if they start looking for some cheap source of finance. I think that the recent rise in interest rate has made the matter worse for the borrowers.

Still, we find that many people stick to their age old habit of transaction through credit cards. It is well established that most credit card companies charge an exorbitant rate of interest. That’s why sometimes I wonder if some people have so much money to waste.
In the recent past, the UK economy has seen a huge rise in the number of county court judgements, highlighting the level of bad debt prevalent in the society.

Unsecured loans are far better than credit cards or store cards since they involve less interest rate. If you think that credit cards are better just because they do not involve any annual fee or offer you Zero per cent schemes, think again. According to RK Hammer, a bank-card advisory firm in the UK, credit card companies took in $13 billion in fees last year, not counting $12 billion in late fees. So, even if your credit card issuer doesn't levy an annual fee, the sponsor has surely loaded it with some other convenient ways so that extra amount could be charged from you.

In comparison to credit card bills, cheap unsecured loans are much better. You can get unsecured loans at a rate that usually varies from 7 to 40 per cent APR.