Personal loan vs credit cards

[Adriel Liwag]

Hey BP, I'm not sure if this question has been posted before. But I'm in the midst of reading @Scott Trench's book "Set For Life" (awesome book btw). I'm at the part where he talks about "good debt" and "bad debt" and explains the difference between a personal loan and credit cards. My question is, I've been flipping houses and have been using my CC's to purchase materials, would it be better to open a personal loan and use the loan for the materials instead of CC's?

Thanks in advance for you input.

[Scott Trench]

I think the key is to understand the interest rate on the debt. Some personal loans can be financed at much lower interest rates than your typical credit card, which really should be paid off in full every month. Carrying credit card debt is possibly even more expensive than the hard money note, depending on your terms.

On the other hand, I think it's perfectly reasonable, and perhaps even to one's advantage, to pay for business expenses with a credit card, so long as it is paid in full each month. Why not take miles, cash back, and other rewards when buying things that you'd pay for anyways with cash? Especially if there is no cash discount.