Millennials have been hit with a series of economic downturns in our young (and some now middle-aged) lives — from the 2007 recession to the ongoing COVID-19 pandemic.
We’ve faced tough job markets, put off buying our forever homes and have been burdened with increasing student loans. We’re certainly no strangers to debt.
Yet still, according to Experian, our generation is open to taking on new debt in the form of personal loans. In the period between 2014-2019, the average personal loan balance among millennials grew 44%. Personal loans can be a good way to build credit (when used responsibly, of course) and refinance debt, but it’s not the only solution to reach your financial goals.
We’ve compared personal loans and credit cards to make it easier for you to weigh the pros and cons of each type of financing before determining the best fit for your situation.
ROUND 1:
Credit Cards
What’s a credit card?
Credit cards offer a convenient way to pay for day-to-day expenses, like groceries and gas. You can earn rewards, pay off debt and boost your credit score when you make timely payments using a credit card. But just like a personal loan, too much of a good thing can be bad for your financial health. Only use as much as you can comfortably afford to pay back in a timely manner.
ROUND 2:
Personal Loans
What’s a personal loan? (a.k.a. unsecured loan)
Unlike traditional loans, personal loans don’t require any collateral (like your house or car). However, because of their riskier nature, some lenders make sure borrowers have a higher credit score. As a general rule, only borrow what you need and have a solid plan to pay it back.
And the winner is ... YOU!
Talk with a financial health coach today to help figure out what’s best for you and your goals. Email a financial coach today.