Loans are generally more suitable for larger expenses, while smaller ones could be paid with a credit card. Regardless, it’s important to know whether it’s secured or unsecured.

In the case of a secured loan, the borrower will be asked to offer an asset/security/collateral to secure the lender’s money; the lender can sell the collateral if you fail to uphold the loan agreements. If you get a secured credit card, you will pay the lender an amount upfront that you can borrow from and pay back over time, which can help build credit history and your credit score.

Unsecured loans and credit cards will rely upon your credit history and “promise” to repay to decide your eligibility and interest rate.

You should always know how much it will cost you before you borrow. Asking yourself questions while learning more about your options can be a great tool: What is the APR (annual percentage rate)? Is the interest rate fixed or variable? How will interest accrue (accumulate)? What about additional or hidden fees?

Similar to the cost of borrowing, you should understand what’s expected of you in the terms of your borrowing agreement and follow through with these terms once you commit. When are payments due? How long is the loan term? Is there a grace period, if so, how long?

Does one lender offer better terms or more benefits than another? Beyond comparing the loan, don’t forget to compare lenders too! Total cost may not be the only factor that matters to you; it’s important to find a lender that offers you the service that you need and deserve.

When taking loans or signing up for a new card, you want to try to prevent or minimize any negative impact on your credit score. You also want to be sure and be confident that your good financial habits and behavior will be recognized and reported to boost your creditworthiness. And, as always, protect yourself and your card rights from fraud!!