Cash 1 Blog

Financial Tips & Guides
Should I use a personal loan or credit card?

Utilizing a Loan Instead of a Credit Card

Updated on March 11, 2022


When should you think about getting a payday loan, title loan or personal loan? Most people tend to wait until they have a financial emergency but there are other circumstances in which the kind of loan programs offered by CASH 1 might be beneficial to you. Of course, financial necessities are always the most important reason. Unexpected needs can arise at any time.

However, there are some other reasons to consider:

Utilizing a loan instead of a credit card: most people have one or two credit cards and try to use them only in case of emergencies. But every now and then an expense will come up, or maybe an opportunity to purchase something at a sale price, and we find ourselves pulling out the credit card in order to take advantage of the savings. Ask yourself when the last time was you put a purchase on a credit card and then paid off the balance by the end of the month. It’s just too easy to let it stay on the card; make the minimum payment and pay it off gradually.

So here’s a question: how long do you think it would take to pay off a credit card at a 14% annual interest rate that has a five thousand dollar balance on it? Maybe you should sit down, because this might come as much as a surprise to you as it did to us. Ready? 22 years. And what’s worse, if all you made were the minimum monthly payments, you would end up spending almost six thousand dollars in interest on top of the repayment of the balance. $5,887 to be exact.

You can probably guess how long it would take to pay off a balance of just a thousand dollars making the minimum payments. Simple math (and we’re probably a little off on this but not that far) tells us that it would take about five years, and you would end up paying almost a thousand dollars on top of the balance in interest payments alone.

By design, the loan programs at CASH 1 don’t take that long to pay off, and when balanced against the amount you would pay if making only the minimum payments on a credit card, cost less in the long run. Think of it in terms of having a deadline, which means you would get out from under that debt much quicker, usually in one to three months’ time depending on the loan you choose and the terms involved.

It just makes sense when you think about it. Credit cards can, in the long run, cost you a lot of money, which you would probably rather spend on yourself. Most of us don’t have the discipline to pay off the balance of a credit card every month. But with a title loan, payday loan or personal loan from CASH 1, that won’t be something you have to worry about.

Photograph of author Joseph Priebe

Joseph Priebe

Joseph Priebe takes pride in assisting audiences with his articles to help them make sound financial decisions.

With over ten years of experience writing financial content his goal at CASH 1 has always been creating engaging and easy-to-digest information for anyone searching for immediate or long-term monetary solutions.

When Joseph is not writing about personal finance, you can find him photographing the Southwest United States with his 4x5 Graflex Crown Graphic camera. He is based in Phoenix, Arizona.