Health club membership is expensive, and most people require a loan to pay for one. Loans and using your credit card are two options, and each has its pros and cons.
Many people decide between a credit card payment or health club loans, which would fall under the category of personal loans, based on the interest rates. Personal loans are on an average three percent less expensive than credit card loans. However, the customer should also consider hidden costs such as the loan processing fees, and annual charges. Moreover, depending on the schemes in vogue, using credit card may offer bonus points, cash back offers, discounts, or other benefits.
Of course, if one has money and is willing to repay the credit card company within the interest free repayment window, then credit card is clearly the preferred choice.
Even otherwise, it may make sense to pay your health club membership with credit cards. The most obvious advantage is the hassle-free process. You already have your credit-card and all you need to do is swipe the card or give the credit card number at the health club. In contrast, you would need to approach your bank and apply for a personal loan, and complete all the paperwork to secure the amount. In any case, getting the loan is not guaranteed, and depends wholly on the discretion of the bank. If your credit score is below par, the bank may refuse the loan outright.
Using health club credit cards offer more flexibility than health club loans. With credit cards, it is possible to pay only a small minimum amount every month and roll over the loan until you have the ability to repay. With loans, failure to pay up the pre-determined EMI would count as a default and impact the credit score adversely.
Another advantage of using health club credit cards is the relative ease in challenging unauthorised charges, compared to fighting an account debt. Many health clubs insist on auto-deduction, and many make unauthorised charges, especially when you terminate your membership. In the same way, it is easier make a compensation claim for defective service when the payment is made by a credit card.