Which one is more cost-effective, borrowing money or credit card? It will become clear if you compare it

Both borrowing money and credit cards can provide fund circulation services, allowing friends who are in urgent need of money to obtain cash. However, the two are different in nature, and it is easy for people to compare them to see how they are used. Which one will be more cost-effective? Here we will analyze it from four aspects.

Which one is more cost-effective, borrowing money or credit card? 1. Purpose: There is only one purpose of borrowing money, which is to borrow money; but credit cards are far more than just that, they can be used for both consumption and borrowing money. In terms of borrowing money alone, there are several methods, such as credit card cash withdrawals and credit card cash installments. . 2. Quota: The maximum borrowing limit is 200,000, but generally everyone’s maximum limit is around 30,000 to 50,000. Like credit cards, the limit can be high or low, depending on the credit card level and the applicant’s credit conditions, but it is usually good to use it. Yes, the limit after two or three years is usually higher than borrowing money. 3. Repayment: There are two types of loan repayments: equal principal and interest, and equal principal. You can borrow and repay at any time. In addition to monthly repayments, you can also repay in advance; credit card borrowings are also repaid every month. , there are full repayments, minimum repayments, and early repayments are also possible. 4. Interest: This is the most critical reference factor for which loan or credit card is more cost-effective. Borrowing interest is calculated on a daily basis, and the daily interest rate is up to 5/10,000, and is generally around 4/10,000. Credit card borrowing can only be repaid in cash installments, and a handling fee is charged monthly, with a monthly rate of about 0.75. For example, if you borrow 10,000 yuan for 30 days, the borrowing interest will be 0.04, and you will have to pay an interest of 120 yuan in 30 days; the credit card cash installment, the monthly rate is 0.75, and you will have to pay a handling fee of 72 yuan in 30 days. In comparison, it seems Credit card cash installment is more economical and more cost-effective.

Summary: In fact, Ant Borrowing and credit cards each have their own characteristics. It is difficult to judge which one is more cost-effective for two products with different properties. It mainly depends on everyone’s needs. As the old saying goes: What suits you is the best. Which one is more cost-effective to borrow with a credit card

It needs to be considered on a case-by-case basis. When the 12-term credit card rate is greater than the annual interest rate of the loan, the credit card installment fee is higher than the interest rate; when the 12-term credit card rate is less than the annual interest rate of the loan, the interest rate is higher than the installment fee of the credit card. That is to say, the comparison of interest rates between credit cards and borrowed money must be carried out when the number of installments is the same. The one with the higher interest rate is the one with the higher interest rate.

Comparison of installment rates between Ant Juebei and credit card installment rates

1. Bank credit card installment rates

Currently, there are two ways for banks to collect installment fees , one is to charge an average monthly handling fee in each installment, such as Agricultural Bank of China, China Construction Bank, Bank of Communications, Minsheng, etc.; the other is to charge a one-time installment handling fee when paying the down payment, such as China Merchants Bank, ICBC, Bank of China, etc. . Obviously, under the same monthly rate conditions, a one-time charge is not as cost-effective as a monthly charge.

However, it should be noted that whether it is a monthly handling fee or a one-time down payment, the installment service fee charged by a bank credit card is based on the entire loan amount each time the repayment interest is calculated. It is calculated based on the calculation, that is to say, no matter how many installments are repaid or how much is repaid, the interest for each installment is the same.

2. Ant Borrowing Installment Rate

Ant Borrowing is currently only open to some Alipay users who meet the requirements. Depending on the loan amount, the daily interest rate is around 0.03% to 0.04%. However, unlike bank credit card installments, Ant Borrowing repays monthly, and the installment interest rate is calculated monthly. Since the principal has been decreasing, so if you repay once every month, the next month's installment interest will be reduced. The final interest ratio is The interest calculated on the entire principal is much less.

3. Summary:

Users who need installments should compare their borrowing amount and the installment rate of the credit card issuing bank to determine which one is more cost-effective before making a choice. Although sometimes Ant Borrowing is cheaper than credit card installment, after all, Ant Borrowing can only be used for consumption at supported online merchants, while credit cards can be used for offline consumption, and if the repayment record is good, it will help improve your credit record. Also more helpful.

Credit card

When using a credit card for overdraft consumption, everyone has an interest-free period of dozens of days. During the interest-free period, you do not need to bear loan interest. If you are unable to pay off the loan on the repayment date and choose to repay in installments, you will have to pay a certain handling fee. For China Merchants Bank credit cards, the installment fee will be between 0 and 1.67 per installment.

When withdrawing cash with a credit card, the interest rate of the credit card will be different from the installment payment. Taking the China Merchants Bank credit card as an example, the handling fee for each transaction is 1% of the loan amount, and the minimum charge is 10 yuan per transaction. In addition, you also need to pay interest on a daily basis, and collect interest based on the daily interest rate of 0.05%, and collect compound interest on a monthly basis. Which one has more interest, credit card or borrowed money?

When the credit card's 12-term interest rate is greater than the annual interest rate of borrowed money, the credit card installment fee is higher than the borrowed interest; when the credit card's 12-term interest rate is less than the annual interest rate of borrowed money , the borrowing interest is higher than the credit card installment fee. That is to say, the comparison of interest rates between credit cards and borrowed money must be carried out when the number of installments is the same. The one with the higher interest rate is the one with the higher interest rate.

First of all, everyone needs to understand that Jiebei is a financial tool that can only provide you with cash loans, while credit cards can be used for direct consumption or cash withdrawals.

Jiebei

Jiebei is a loan product that calculates interest on a daily basis, with a daily interest rate between 0.015-0.06. Everyone's credit situation will be different. If the daily interest rate of the loan is 0.05 and the loan amount is 10,000 yuan, then the interest on the loan for one day is 5 yuan.

Credit card

When using a credit card for overdraft consumption, everyone has an interest-free period of dozens of days. During the interest-free period, you do not need to bear loan interest. If you are unable to pay off the loan on the repayment date and choose to repay in installments, you will have to pay a certain handling fee. For China Merchants Bank credit cards, the installment fee will be between 0 and 1.67 per installment.

When withdrawing cash with a credit card, the interest rate of the credit card will be different from the installment payment. Taking the China Merchants Bank credit card as an example, the handling fee for each transaction is 1% of the loan amount, and the minimum charge is 10 yuan per transaction. In addition, you also need to pay interest on a daily basis, and collect interest based on the daily interest rate of 0.05%, and collect compound interest on a monthly basis.

It is not difficult to see that which one has higher interest rate, borrowing money or credit card, should be judged based on the purpose. If you use it to pay for consumption directly, then the interest rate will be lower if you use a credit card. If you want to withdraw cash for consumption, then borrowing money may be lower.