Personal Loan vs. Credit Card for Holiday Spending: Which Should You Choose? 

🎄 Plan Ahead for the Holidays

It’s never too early to start planning for the holidays! With rising prices and tighter budgets, many people are looking for help to cover holiday expenses. Should you use a credit card or take out a personal loan?

In this guide, we’ll compare both options so you can decide which one is best for your holiday spending.

💰 What Is a Personal Loan?

A personal loan lets you borrow a set amount of money from a bank, credit union, or online lender. You pay it back in monthly payments over a fixed amount of time, usually with a fixed interest rate.

✅ Key Features:

• Loan amounts: Usually from $1,000 to $50,000+
• Term length: 1 to 7 years
• Interest rate: Usually fixed
• Unsecured: No collateral needed
• Monthly payments: Fixed amount each month (easy for budgeting)

📌 Common Uses:

• Debt consolidation
• Home repairs or big purchases
• Medical bills
• Weddings or vacations
• Holiday spending (if costs are high)

⚠️ Things to Consider:

• Good credit is often needed for the best rates
• Some lenders charge an origination fee
• Missed payments can hurt your credit score

💡 What Is an Origination Fee?

An origination fee is a one-time cost some lenders charge to set up your loan. It’s usually taken out of the loan amount before you get the money.

• Typical fee: 1%–8% of the loan
• Example: If you borrow $10,000 with a 5% fee, you’ll receive $9,500 but still repay $10,000 plus interest