Credit card or mini credit? Choose the best financing option

The market is full of financing options for our debts or expenses. Among the many options available, there are two that can be used interchangeably, credit card or mini-credit.

Both products were conceived for a similar function, however, there are more differences than similarities, we will see if we are able to explain when one or the other is best for us:

The credit card

The credit card

The credit card is a numbered plastic rectangle. They are cards that present a magnetic stripe or a microchip, and that allows you to make purchases on credit. To request a card of this type, it is necessary to go to a financial institution or banking entity. The entity will request the interested party a series of documents or guarantees. These guarantees are to ensure that you are a solvent person and able to meet your payment obligations.

The credit card, also known as plastic money, receives its name for giving a person the possibility to make purchases without having cash. By using the card the user is automatically contracting a debt with the issuer of the card.

A summary of all transactions made during the previous thirty days is sent monthly to users. There is the possibility of paying off all debt or making full or partial payments; In this case, the outstanding debt accumulates new interest, in accordance with the provisions of the contract.

The microcredit

The microcredit

It is a type of loan that is generally characterized by being of reduced amounts and that has special conditions regarding its interest rates and repayment terms. This type of loan has taken special relevance since it represents an important mechanism of business leverage.

Credit or mini-credit card to request financing

We will see what particular characteristics both products have in order to choose between the credit card or the mini-credit:

Characteristics of mini-credits

  • The amount does not usually exceed 1000 dollars.
  • The maximum expiration date of 30 to 40 days for its return, from the day you receive the amount in your account.
  • The hiring procedure is usually done completely online and does not require paperwork.
  • The time that elapses between the analysis of the solvency of the client and the approval of the operation is only a few minutes.
  • A payroll or guarantee is not usually requested.
  • They can be hired even appearing in files such as Asnef or Rai.
  • They are intended to solve small contingencies.

Characteristics of credit cards

  • Credit cards have a monthly credit limit, which can vary between $ 2,000 and $ 5,000.
  • The debt repayment date can be extended for several months.
  • You can contact online or in the physical offices of banking entities.
  • The granting of the credit card can depend on many factors, such as the solvency of the client, his profile as a client or you must meet some requirements.
  • Generally, you will need to contract an associated account or domicile receipts or payroll.
  • They include discounts at affiliated merchants as well as various insurance on your card.
  • You can get money from ATMs.
  • They are intended both for your usual purchases and to finance large operations.

Choose a credit card or a mini-credit?

Choose a credit card or a mini-credit?

Credit cards are subject to much more demanding requirements than microcredits. They are usually associated with a bank. In addition, the application for a credit card may include the hiring of a checking or savings account. This associated account obligation may involve an additional hidden cost.

The mini-credits have less demanding requirements and can be requested online.

There are personalized mini-credits that adapt in amount, term and interest rate to the needs of the person requesting it. This is the case of the mini-credits of Good Credit, an online company that, after your request, makes you an offer tailored to your needs. If the applicant wants the mini-loan under other conditions, he will simply have to choose the term and amount he needs and the interest rate will adapt accordingly. Credit cards are much more rigid in this regard, with predetermined interest rates and fixed terms for all customers.

Private loan companies are much more flexible than a bank.

That is why the mini-loans have a much higher approval ratio, without the need to provide as many links as credit cards, you will simply have to provide your personal data and be a bank account holder where they will deposit the loan amount.

Mini credit or credit card?

bank

It depends on your needs and your demonstrable solvency

  • The mini-credits have a maximum amount limit to request, which is usually less than 1,000 dollars. This limitation, together with the repayment of the credit in a period of approximately 1 month or 1 month and a half, is a double-edged sword.
  • Applying for a mini-credit rarely has associated fees.
  • Credit cards have associated fees.
  • Credit cards may have a higher limit but may also have a higher cost, although they are more flexible in the return terms by a fee.

A mini-loan is the most useful product to solve unforeseen circumstances in the family economy: a breakdown in the car or pay a bill urgently. Applying for a mini-loan is 95% faster than managing through the bank.

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