Skip to Content loading...

Not a member yet?

Listerhill Credit Union is a nonprofit financial cooperative improving lives in our community.

If you live in Alabama, Georgia, Mississippi, Florida, or Tennessee, you are eligible to become a member. Depending on your individual eligibility, we may require membership into an approved association at no cost to you.

You can also qualify for membership by being a family member of a current or potential Listerhill member.

With only $5, you can join Listerhill today and start taking advantage of a lifetime membership.

Woman Using Credit Card on Computer

Credit Card or Personal Loan: Which Should You Choose?

Are you considering a credit card or personal loan but unsure which to choose? Learn about the similarities and differences between the options.

Editorial Note: Articles published are intended to provide general information and educational content related to personal finance, banking, and credit union services. While we strive to ensure the accuracy and reliability of the information presented, it should not be considered as financial advice and may be revised as needed.

Personal financing can help you feel more confident and secure as you navigate through life. Whether you need to cover an unforeseen expense or want to treat yourself to a little luxury, a credit card or personal loan is just the ticket.

But how do you know if a credit card or personal loan is right for you? They both have different strengths so it comes down to personal choice. Read on to find out your best match.

Which Fits Your Needs Better: A Credit Card or Personal Loan?

Credit cards and personal loans have convenient similarities as well as a few differences that make them unique. Here are a few ideas to get you started on making your decision.

Both a credit card and a personal loan can be used to:

  • Consolidate debt by transferring multiple balances with different lenders into one account

  • Build credit by making timely payments each month

  • Pay bills or make purchases

Choose a credit card if you:

  • Want a financial safety net for unexpected costs

  • Don't have a specific expense or amount of money in mind

  • Don't mind different payment amounts each month

Choose a personal loan if you:

  • Have a specific amount of money that you need in one instance

  • Have a specific set of expenses you know you need to cover

  • Want to pay the funds back in equal installments every month

Choose a Credit Card If You Want Revolving Credit

A credit card is a form of revolving credit, which means you can use it to make purchases and then pay the money back in an endless cycle.

Here's how credit cards work:

  • Your card has a limit and the funds are available to you on-demand.

  • You can choose to pay off your entire balance each month or just meet the minimum balance due.

  • If you pay off your entire balance each month, you likely won't pay any interest.

Remember, it's a good idea to use only around 30% of your credit limit so you have a great debt-to-credit ratio, which will help boost your credit score.

Choose a Personal Loan If You Want a Lump Sum of Cash

A personal loan is a type of installment loan, which means you receive the full loan amount at once then pay it back in equal amounts each month until it's paid off.

Here's how personal loans work:

  • You get the agreed loan amount in a single transfer or check from your lender.

  • You can choose to spend it all at once for a set purpose or keep some aside for a rainy day.

  • Your monthly payment includes the principal loan amount plus interest.

Regarding monthly payments, keep in mind that a shorter term means a higher monthly payment but less interest, while a longer term means a lower monthly term but higher interest.

Choose a Credit Card If You Want Perks and Rewards

A credit card is a great choice if you're the kind of person who loves the fun side of financing, instead of just sticking to a payment schedule.

Different credit cards may allow you to:

  • Collect points on all your purchases and redeem them for merchandise, gift cards, or travel experiences.

  • Earn a percentage of cashback on all your purchases, so you get a nice surprise when you get a deposit into your account.

Which Has Lower Interest Rates: A Credit Card or Personal Loan?

Interest rates are a major selling point when it comes to personal financing, so be sure to shop around for the most competitive rates. In general, personal loans may have slightly lower interest rates than credit cards

Here are a few pointers to keep in mind:

  • For both a credit card and a personal loan, your credit score will impact what annual percentage rate (APR) you're offered. The higher your score, the lower your rate.

  • APR includes the rate plus any fees in one convenient figure.

  • Interest rates might be fixed (stay the same through the life of your loan or until you close your credit card) or variable (change with the market).

  • Your local credit union (ahem) may offer lower rates than other financial institutions because credit unions distribute revenue back to members through low-interest loans and generous interest on savings.

Credit Card or Personal Loan? Choose Listerhill!

If you're still wondering whether a credit card or personal loan is better for you, keep in mind that one isn't better than the other. It comes down to your financial situation.

A credit card is highly flexible. You can leave it in a drawer and use it only when you need to, or you can use it to make all your purchases so you earn rewards. The decision is yours!

On the other hand, a personal loan means you're committing to borrow and pay back a fixed amount of money. It's an easy, affordable option because it has equal monthly payments.

For more information, you could try talking to a financial advisor or take a closer look at some particular credit cards to see if one seems right for you.

See our credit card and personal loan options.

default icon for Solution Finder Intro
What can we help you with? *
default icon for Checking For Mature Members
What are you borrowing for?
default icon for Checking For Mature Members
Vehicle Options
default icon for Checking For Mature Members
Home Options
default icon for Carrolls
What are you saving for?
default icon for Carrolls
How old are your kids?
default icon for Cord
Which of these banking options are you interested in?
default icon for Cord
How old are you (or your child)?
default icon for Cord
How old are you?
default icon for Cord
What kind of account are you looking for?
search popup background

What are you looking for?

Common Links

Frequently Asked Questions

  • How can I avoid overdraft fees?

    All Listerhill checking accounts are eligible for 3 Overdraft or NSF Fee refunds per year. To request a refund, visit a Listerhill branch or call 1-800-239-6033.

    Additionally, we provide our members with overdraf services like:

    • Standard Overdraft Coverage

    • Debit Card Overdraft Coverage

    • Overdraft Protection

  • How can I start using mobile banking?

    To Get Started with our Mobile Banking app:

  • Do I have to pay any monthly service fees for having a checking account at Listerhill?

    Our Everyday Checking account comes with no minimum balances and no monthly service fees, so if you choose this account, you won’t have to pay any monthly fees, no matter what your daily balances are.

    If you’re interested in Growth Checking, you’ll have to pay a $10 monthly fee is your average balance is below $1,000. You can easily waive the account fee by keeping $1,000 or more in your account. That way, you can earn interest on your deposits without paying any monthly maintenance fees. It’s a win-win!

  • Why should I open a Growth Checking account?

    Growth Checking is the perfect account for those who want to see their money grow faster. This account offers high returns on your deposits for a small monthly service fee. You can waive the monthly fee by keeping $1,000 or more in your account. What’s even better is that the more you keep in your account, the higher the interest rate you’ll earn, so it makes sense to keep higher balances in your Growth Checking!

    If you want to put your money to work for you, open a Growth Checking account. Simply click here to start your online application as a new member or log into online or mobile banking to open your checking account if you’re already an established member. It normally takes 10 minutes or less to complete!

  • What is everyday checking?

    Everyday Checking is our free checking account. This account is convenient and simple with benefits like no minimum balances and no monthly service charges.

    If you're seeking a hassle-free checking experience coupled with top-rated online and mobile banking services, as well as options for overdraft protection and customizable account alerts, Everyday Checking is the ideal choice for you.

    Plus, our online application makes getting your new checking account easier than ever. Simply click here to start your online application as a new member or log into online or mobile banking to open your checking account if you’re already an established member. It normally takes 10 minutes or less to complete!