Unexpected expenses are, by nature, unplanned and costly. While it’s best to have a rainy-day fund, a survey found that 47% of Americans would borrow for a $400 emergency. As a Wasatch Peaks member, you have two borrowing options for emergency funding: signature (personal) loans and credit cards. Here are several pros and cons to each:


    Credit cards have credit limits in the thousands, enough to cover a small emergency. The value of credit cards is their convenience; there’s no need for a new loan each time you incur an expense. However, many people don’t have sufficient credit to cover major financial emergencies and instead choose to utilize a signature loan. Your signature loan approval amount depends on several factors: income, credit score and other assets. For borrowers with good credit history and a strong ability to repay, these loans could be $20,000, enough for serious unexpected expenses.

    Repayment options

    Credit card repayment involves at least a monthly minimum payment and no fixed term to repayment. Paying off your loan can take forever. In contrast, a Signature Loan, includes a fixed monthly payment that lets you repay the loan in a set amount of time. You make equal payments of both interest and principal over the loan’s life with no penalty for early repayment.


    Credit cards only work at a merchant terminal; they’re difficult to use for paying back friends. A Signature Loan is deposited directly into your draft account. You can withdraw it as cash, write checks or use auto draft features. If you’re negotiating a reduced price for a major expense, many businesses offer a cash discount—they pay for processing fees and prefer cash. If you’re paying a hospital, they may also accept a lower fee if you pay cash.

    Interest rates

    Credit card interest rates can be high—the global average is 15%—but Wasatch Peaks offers 8.50% APR OAC. Some credit cards fluctuate their interest rates based on the prime interest rate and can alter your rate if your credit score changes dramatically, making it difficult to plan your financial future. A Signature Loan has a fixed interest rate that never increases if you don’t miss a payment. You can make a future budget that involves paying a fixed amount over approximately 4 years. Interest rates on Signature Loans are 8.85% APR OAC.

    As a member of Wasatch Peaks Credit Union, you have access to competitive rates for Signature Loans. If you’re in a hard place, Wasatch Peaks can help. Call, click or stop by today!

    Wasatch Peaks

    Written by Wasatch Peaks