credit card lending

How to Decide Between Credit Card Lending vs. Title Lending

Do you need to temporarily expand your financial resources? Both credit card lending and title lending can provide you with the financial means to make necessary purchases and address emergencies. Choosing between the two requires that you assess what each has to offer and the reason you need the loan.

Credit Card Lending and Title Lending: Which Is Better?

Both credit card lending and title loans have their own set of pros and cons. To decide which lending option is right for you, you will want to consider the following. 

The Pros and Cons of Credit Card Lending

Credit Card Pros

  • When approved for a credit card, you are given a line of credit. Each time you use it to make purchases, your credit card issuer is lending you the money. As long as you do not max out your card, you will have revolving credit that you can utilize whenever needed.  
  • There are plenty of credit card lending options. With a wide range of credit card issuers, you can shop around for one that is not limited in use and has lower annual percentage rates.
  • Having a credit card and making monthly payments online can help build your credit score.

Credit Card Cons

  • Unfortunately, credit cards don’t have fixed interest rates. This means that your interest rate can change according to the economy.
  • At times, your credit card issuer will increase your line of credit without getting your consent. This may sound like a perk, but an increased credit line can provoke some credit cardholders to spend more and go further into debt.
  • Having revolving credit where you are using above 70% of your credit line can negatively impact your credit score and prevent you from getting future loans.
  • Getting a credit card requires a credit check where poor or non-existent credit can disqualify you.
  • Finding out if you are approved and waiting for your card in the mail can take several weeks. This can be problematic if you need funds fast.

car from title lending cash

The Pros and Cons of Title Lending

Title Loan Pros

  • Title loans give you the funds you need in one lump sum. This can be ideal for anyone looking to get a specific loan amount and limit their spending.
  • There is also a short wait period for how fast you can receive your funds. You can typically get the money you need the same day you apply or by the following business day.
  • Application processing time is fast. You can have an answer as to whether you are approved in as little as thirty minutes.
  • Title loan businesses welcome all types of credit. It also does not hurt your credit score to apply.

Title Loan Cons 

  • With credit cards you pay off part of what you borrowed and create revolving credit; this is not the case with title loans. If you need funds later down the line, you will have to wait until your current title loan agreement is met and submit another application.
  • Applying online may not always be an option the way it is with credit cards. Many title loan providers require meeting you in person to complete part of the application process.
  • Title loans are not meant for small daily purchases. Frivolous spending of title loan funds is discouraged by providers.

Be Honest with Yourself When Deciding

When choosing between credit cards and title loans, you should be as honest with yourself about your spending habits as possible. Having a line of credit can be dangerous when you have little control over your spending.

You also want to consider what you need the funds for. Title loans come in handy for financial emergencies while credit cards are more useful for everyday purchases.

woman happy from alabama title pawn

Do You Need Fast Emergency Funds?

If you need funds for a specific emergency and need it fast, then a title pawn might be the financial resource you are looking for.

Alabama Title Loans, Inc. can provide you with the financial help you need to tackle any unexpected financial obligations you find yourself dealing with.

Alabama Title Loans, Inc.

Alabama Title Loans, Inc. specializes in getting customers fast cash for emergencies. You can get approved for anywhere from $300 to $15,000. All you need to apply is:

  • A vehicle title that is lien-free and under your name.
  • A driver’s license or a state-issued I.D. showing you are 18 years old or older.
  • Your vehicle for inspection.

When you apply for a title pawn with Alabama Title Loans, Inc., we will try to make it as convenient as possible for you. Although an inspection of your vehicle is necessary to determine the pawn amount, you won’t need to leave the comfort of your home to have it done. A loan specialist will come to you!

Get A Title Pawn Today

Credit card lending may not be ideal for an urgent financial emergency, but a title pawn may be. Find out if you qualify and submit an online form today with Alabama Title Loans, Inc.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Daniel Dewitt

Daniel Dewitt is a lifetime blogger with a finely-honed ability to break down, analyze, and interpret economic trends for the layman. He's fiercely invested in spreading financial literacy and helping everyday people gain the tools they need for their own economic success.