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Bad Credit Loan or Credit Card? Which One Should I Get?

bad credit loans australia

Consolidating a debt might require another form of credit. And when your credit score isn’t too good, you might feel like there are not many choices available. Well, you can still choose between a bad credit loan and a credit card.

You will find plenty of sites which are specialised in helping people who find themselves in a bad spot, financially speaking. However, before this, you should get some information first. Let’s dive in!

What does a bad credit loan imply?

When you are in a situation where your credit isn’t as good as you wish, then you shouldn’t despair. There is always the possibility of applying for a bad credit loan. This kind of loan isn’t altogether different from the typical personal loan. In fact, it’s a personal loan adjusted to accommodate people with bad credit.

Coming either secured or unsecured, a bad credit loan is often a better choice for people who would like equal monthly payments. This is ideal for a long-term financing. Also, a bad credit loan can come with lower rates than the ones that might come with credit cards, but we’ll talk more about this later on in the article.

We live in a day and age when not everything follows a plan. From an unwanted accident to a hopeful delight which is a baby, you should always have a back-up. That’s why it would be better to opt for a bad credit loan as you would know how much you’d have to pay each month.

How about a credit card?

A credit card is often desired by people with perfect credit. That’s because they will get a 0% introductory fee, allowing them to keep the payments to a minimum. However, if you are not such a person and your credit has seen better days, then you should know that credit cards are expensive.

How expensive? There are a lot of people who state the fact that these cards represent the most expensive form of getting financing available. That’s because they can often come with high interest rates. Calculated as a revolved debt, a credit card will require that you pay each month the minimum payment that is dependent on the balance. In order to avoid higher fees, then we suggest that you pay the full amount each time.

How does a credit card differ from a bad credit loan?

The credit card comes with a limit that is set depending on the amount you are spending each month. It also depends on how much you are paying back on a monthly basis. So, yes, there are some differences between a credit card and a bad credit loan.

Beyond what we already said, we should also add the fact that, for people with bad credit, a credit card is often a secured type of financing.

On the other hand, a bad credit loan might come unsecured if you manage to stay on a good financial track.

Is there a way to get a “helpful” credit card?

Don’t be too quick to judge. As long as you use it for purchases that you are sure you can pay back, a credit card can prove itself quite useful. From paying the bills to other types of daily expenses, a credit card will be a nice resource to have.

Also, there are those types of credit cards that reward you. From cash to travel vouchers, you will get bonuses that are dependent on your spending and your repaying capabilities.

Which one is better?

When you want to turn multiple payments into a single one, you should know that you can use both of them. A credit card should be used for short-term financing. If you manage to pay back and only spend money on necessary things, it won’t cause many inconveniences. Another thing that needs to be done before applying for a credit card is a plan. A good plan is the best way to make sure that you won’t come across high fees and rates. Take a look and see why you’d need it and only apply for a credit card when you’re sure that it’s the best option.

A bad credit personal loan works for people who would like a longer repayment period. That’s because, this way, they would have to pay lower rates and they will be left with something each month. Of course, this will work best only if you can manage to find a loan that comes with lower rates when compared to your existing debt. Otherwise, you would end up accumulating more debt.


Both of these might work if you carefully plan before and ahead. Think how much you can pay back each month, talk with various financial advisors and be very careful where you apply. For starters, you can enquire with Bad Credit Loans.