If you have a bad credit rating, one thing is for sure; you'll find it difficult to borrow, whether you're seeking to get a credit card, loan, car finance or a home mortgage. It is ironic then that borrowing might be just what you need in order to better your credit rating.

Borrowing with bad credit is by no means impossible but it entails paying very high interest rates, as well as other restrictions. If you find yourself in a situation where you have to brave these terms, you might wonder; between credit cards and loans, what's actually better for you. Below are some of the reasons why a credit card is better than a loan if you have bad credit:

Ease

People with bad credit will have difficulty either way but credit cards for bad credit borrowers are easier to acquire than a bad credit loan would be. Lenders find it easier to scale the risk on a credit card than on a loan; a credit card can start off with a credit limit of 300 and the lender learns to trust you, they'd increase the limit.

Flexibility

A loan is a one-off fixed term commitment (e.g. 5 years) where as a credit card takes a pay when you can approach (minimum payment excluded).

Credit score

Most credit cards update FICO on a monthly basis, if you keep making regular payments on your bad credit card; it's likely that your credit score will keep improving by a few points each month.