Credit Card Vs. Pawn Shop Loan
When times are difficult we are often faced with multiple options for loans. It is important, however, to make the right choices to prevent more hardships in the future. When considering credit card and pawn shop debt, always consider the purpose of the loan and your ultimate goals, and the risks and benefits of each type of loan.
Other People Are Reading
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Credit Card Pros
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Credit card debt can usually be paid off without any incurred interest within a month and in most circumstances doesn't require any collateral. In addition, credit card debt is instantaneous and accepted at virtually most businesses. Likewise, credit card companies often offer rewards and points that can be redeemed for free travel or merchandise.
Credit Card Cons
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Credit cards require pre-approval, which means a history of good credit is usually necessary. If you have not borrowed money in the past, or have borrowed and haven't paid on time, you are unlikely to be approved.
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Pawn Shop Loan Pros
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Getting a loan at a pawn shop is relatively quick and easy, and no credit history is usually needed; almost everyone qualifies.
Pawn Shop Loan Cons
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Pawn shop loans usually require some sort of collateral and if the loan is not paid up on time, the collateral is forfeited in most circumstances. Pawn shops tend to have high interest rates, sometimes upward of 25 percent per week, depending on the laws in your state. Some pawn shops also tend to be unreliable and unscrupulous, according to information at pawnshops.us.
Is a Credit Card Loan Better Than a Pawn Shop Loan?
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According to an article titled "The skinny on pawnshops" at bankratre.com, you should not try to get a loan from a pawn shop unless you absolutely have no other choice. The disadvantages outweigh the advantages of pawn shops. Credit card companies are more secure and reliable as lenders than pawn shops.
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