Credit Card vs Personal Loan — Which Costs Less?

Credit Card vs Personal Loan

Credit Card vs Personal Loan — Which Costs Less?

The average US credit card APR is 22.8% in 2026. Personal loans average 12.4%. The difference compounds fast on $15K+ balances.

Verdict

For balances over $5K that you cannot pay off in 6 months, a personal loan at 11-15% APR typically saves $3-7K in interest vs leaving it on the credit card at 22%+. The catch: discipline to not re-charge the credit card.

Side-by-side comparison

 Credit CardPersonal Loan
Typical APR (2026)18-29%10-16%
TermOpen (revolving)24-60 months fixed
Minimum payment~2% of balanceFixed monthly
Impact on credit scoreHigh utilization hurtsInstallment line; can help mix
Interest on $10K, 5 years~$10,500~$3,200

Who should pick Credit Card

Anyone with a balance they’ll pay off in 1-3 months (intro 0% APR period). Heavy reward-card users who pay in full each month.

Who should pick Personal Loan

Anyone carrying $5K+ for 12+ months. Borrowers with credit scores >680 who qualify for sub-15% personal loan rates. Anyone consolidating multiple cards.

Related tools

Disclaimer. Comparison numbers depend on your tax bracket, state, and time horizon. Educational only — not personalized financial advice. See our Financial Disclaimer.

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