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Home > Which Type of Credit is Right for You?
Which Type of Credit is Right for You?11/7/2023

person trying to make a decision


Both credit cards and personal loans are popular financial tools to borrow money. They can be used for similar types of purchases, so it can be difficult to determine which type of credit is best suited for your financial needs. To help you make an informed decision, we're sharing the differences between credit cards and personal loans and when it's best to use a credit card or personal loan.

What's the difference between credit cards and personal loans?

Credit cards and personal loans are typically unsecured and can be used to pay for almost anything you want. Because you're not securing the loan with property or collateral, like a house or a car, you don't risk losing your property if you're unable to make on-time payments, however your credit score will take a hit. Additionally, being approved for a credit card or personal loan depends on your finances and creditworthiness. The key differences between credit cards and personal loans are their structure, repayment schedule, and usage flexibility. Other differences include interest rates, fees, and borrowing limits. Below is an example of how Members First credit cards compare to our personal loans. To find out which product fits your personal needs, take our Financial Wellness Quiz.


Credit Cards

Personal Loans


Credit cards provide a revolving line of credit, allowing you to borrow up to a certain limit and repay it over time.

Personal loans provide a fixed amount of money that is repaid in equal monthly installments over a specified period.

Interest Rates

Credit cards typically have a variable interest rate on any unpaid balance. The average credit card interest rate is around 15-20%. Members First currently offers two rewarding credit card options. Both card options come with a fixed rate that is low and competitive, meaning you never have to worry about surprise rate hikes.

Personal loans have a fixed interest rate for the life of the loan. Interest rates for personal loans can range from 5-36% depending on various factors like the loan term and your credit score. Members First has a variety of personal loan options to choose from — including secured options — all with low, competitive rates.


Credit cards can have an annual fee, foreign transaction fee, and late payment fees.

Personal loans can have origination and late payment fees.


Credit cards offer more flexibility in terms of repayment. You have the option to pay the minimum monthly payment or the full balance. However, paying only the minimum can lead to high-interest costs and a long repayment period.

Personal loans have a fixed repayment schedule, ensuring you pay off the debt within a specific timeframe or set term.

Borrowing Limits

Borrowing limits for credit cards are typically lower than personal loan amounts. Your credit limit is determined based on factors like income and credit history.

Personal loans can provide higher borrowing limits, allowing you access to larger amounts of money.

Usage Flexibility

Credit cards offer more flexibility in terms of usage. They can be used for daily expenses, online purchases, travel expenses, and emergencies.

Personal loans are typically used for specific purposes like major purchases, debt consolidation, or home improvement.


When is it best to use a credit card versus a personal loan?

Ultimately, the choice between a credit card and a personal loan depends on your financial goals, borrowing needs, and personal preferences. It's important to carefully consider interest rates, repayment terms, and your ability to handle debt before making a decision. In general, credit cards are best used for daily spending while personal loans are better suited for a specific purpose like remodeling your kitchen.

Credit Cards

Personal Loans

Credit cards are a good option when you need repeated access to funds.  It's best to use your credit card to finance smaller expenses that you can repay quickly. 

A personal loan is a good option when you qualify for a low APR (Annual Percentage Rate), making your monthly payments more affordable.

A credit card is a good option to consolidate debt if you are able to get a 0% or low-interest APR offer.

Personal loans are a good option if you want to consolidate large, high-interest debts into one lower-interest loan.

A credit card is a great option if it offers rewards. Paying for day-to-day expenses like groceries and gas on your card can help you earn rewards like cash back, statement credits, or merchandise quickly.

Personal loans are best when you need financing for a large, one-time expense. Personal loans are installment loans and are not meant to be taken out frequently.


We'll Lend A Helping Hand

If you have any questions or would like to learn more about our credit card or personal loan options, speak with a Members First Representative. Give us a call at (850) 434-2211 or stop by one of our branch locations.

Ready to get started? Apply for A Loan. 


APR = Annual Percentage Rate. All loans are subject to credit approval. Rates and terms are based on individual credit worthiness. Terms and conditions apply. NCUA Insured. 


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Members First CU of Florida
NMLS #405711
Equal Housing Lender National Credit Union Administration
This Credit Union is federally-insured by the National Credit Union Administration. We do business in accordance with the Fair Housing Law and Equal Opportunity Credit Act.
Members First Credit Union of Florida is not affiliated with Members First Credit Union (Kentucky)

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