Personal payday loan or credit card?

Would you like to buy furniture, do-it-yourself material with the Jumbo card, or yourself with the Manor card?

Wouldn’t it be interesting to calculate the total amount of your expenses and apply for a loan from a broker or bank instead of paying everything with a credit card?

At what point is it worth paying with a credit card or the money from a personal payday loan? What are the advantages and disadvantages of these two funds?


Funded amount

personal loan

There is no minimum amount for a credit card and the maximum limit for the majority of the population is USD 10,000 per credit card, except for people in a very good financial situation.

The personal payday loan usually starts at USD 5,000 (for some also USD 3,000) up to USD 250,000. This varies from one banking institution to another.



With the credit card you are completely flexible, as you can withdraw money at any time and as long as you do not reach the credit limit. The repayment of the purchases on credit allows you to withdraw money with your card again.

In contrast, you cannot spend money on a personal payday loan until it has been transferred to your account by the bank. The repayments do not extend your line of credit. To do this, you would have to submit a new loan application.



Interest rate

The interest rates on the credit cards are very high, at around 15%, except for the free cards from COOP and MIGROS, which are both at 9.9%.

The personal payday loan at MoneyMind Bank starts at 5.9%


Repayment duration

With the credit card, the duration of the repayment can be unlimited.

With a personal payday loan, the duration of the repayment is limited. It amounts to at least 6 months and can last up to 10 years, as with Earnfund Finance.



In addition to the interest, you will be charged additional costs for the credit card, such as the annual fee for some cards, but also costs for the purchase at ATMs or payment fees.

With a personal payday loan you only pay the monthly installment, the interest is already included. This means there are no additional costs!


Overindebtedness risk

Both personal credit and credit cards are to a certain extent responsible for the over-indebtedness of households (1 in 10) in Switzerland and young people (1 in 4).

But the credit card problem is even more complex. Little by little, you get used to paying small amounts each month, which get bigger and bigger with different cards until one day you lose track and don’t know how to pay everything.


Pooling of debts

money loan

Everyone can have multiple credit cards, but as the debt grows, interest rates stay high and administration becomes complicated.

With a credit company, you can apply for a credit combination that:

  • Summarize all of your monthly payments into one
  • The total amount of your installments is reduced thanks to a lower interest rate



Credit cards are perfect for smaller expenses. You are more flexible in terms of amount, usage and repayment. In return, they are more expensive and the risk of over-indebtedness creeps in imperceptibly.

In general, a personal payday loan is recommended for large purchases. If, for example, you move into a new apartment (new living room, electrical equipment and multimedia, moving costs etc.) or if you are expecting a child (decorating a child’s room, clothes etc.), you should calculate the estimated total amount. If this is USD 5,000 or more, we advise you to get a loan because you pay less interest.

Finally, if you have multiple credit cards and the accumulated debt too big, you will apply for a credit repayment order to cut interest rates and simplify the life, because you only have to pay a single bill.

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