Why choose a personal loan instead of a credit card?

At Fair Go Finance, we’ve always believed that when you’re looking for extra funds, a personal loan is often a better option than a credit card. And in 2025, that still holds true. 

Why? Because a personal loan gives you structure, clarity and an end point—something credit cards don’t always offer. Here are five solid reasons why a personal loan could be the smarter move. 

1. Personal loans have an end date, but credit cards can drag on 

One of the biggest traps with credit cards is that the debt just keeps rolling. There’s no end date unless you actively pay it down—and with interest charges, that can take years. In some cases, people are still paying off purchases they made five or even ten years ago. 

With a fixed-rate personal loan, your repayments stay the same each cycle, making it easier to budget and plan ahead. And best of all, you’ll know exactly when the debt will be gone. 

2. Credit cards can be very confusing

Credit cards come with a long list of terms you need to navigate, statement dates, due dates, varying interest rates, cash advance fees, and more. And that “interest free” period that sounds so appealing? It often leads to extra charges when you can’t repay the full balance in time. 

Personal loans are much easier to follow. There’s one amount to repay each month, one set schedule, and no ongoing temptation to spend more once you’ve got the funds. 

3. A Fair Go Finance personal loan provides great benefits and can help actively improve your credit score

At Fair Go Finance, if you keep timely payments on your personal loan, you will benefit in many ways.

Firstly, you will be eligible for our Mates Rates Loyalty Rewards Program – so whenever you return for a loan, you can be rewarded with lower interest rates and discounts on your application fee.

Secondly, our rates are personalised. Unlike credit cards which generally have one rate for everyone, we consider your credit profile and can reward you with even lower rates if you have a decent credit score.

And lastly, because Fair Go Finance uses Comprehensive Credit Reporting (CCR) you can actively improve your credit rating which can then lead you to being offered even better products and rates in the future.

4. Credit cards can get stolen

There’s a lot of work required if your credit card is ever stolen.

There’s contacting the bank, cancelling accounts, re-organising direct debits and re-establishing payment arrangements.

Opting for a personal loan not only keeps you on track with regular payments, but it’s impossible to be stolen.

5. Credit cards can get out of hand – watch out for cash advances

Because credit cards are easy to tap or swipe, people can easily pile extra purchases or cash advances onto their card.

By deciding to take “cash” out of your credit card (a cash advance) you not only pay interest on it straight away but you also may get charged a fee for the privilege. Suddenly, the interest and fees can start mounting up and before you know it, even the minimum balance can become hard to pay.

If your credit card repayments aren’t met, your credit report will then be updated by your credit card provider indicating you’ve not paid it on time, ultimately giving you “bad credit“.

Personal loans are designed so a lump sum payment is made into your bank account, and from that point on, you can’t access any more funds.

As you can see, there are a lot of reasons why a personal loan is a better choice over a credit card facility.

But if you’re still undecided, why not check out the comparison graphics in our blog “Personal loans VS Credit Cards : What to compare and consider” and ask yourself, would you really want to take 18 years to repay a debt?