Cards and loans go head-to-head THEY used to be totally different animals but the credit card and personal loan are becoming more similar. Ratings agency Cannex said the two products were now competing head for head when consumers wanted to consolidate loans. "After car purchases, debt consolidation is the second most popular reason for taking out a personal loan but credit cards are challenging this with very appealing zero per cent balance transfer offers," said analyst Harry Senlitonga. While personal loans still on average offer lower interest rates, Harry said faster and easier approvals were giving credit cards the edge. He warned that those choosing the credit card route needed to be very disciplined and not buy anything further on the card. If you can do that, a $10,000 debt paid off over three years can actually be $300 cheaper due to the six month interest free period. In the same example, if the person relapsed and started only repaying the minimum monthly balance, their three year credit card loan would blow out by 16 years.