This is the difference between credit cards and SMS loans

In the loan market, there are a number of different alternatives to SMS loans per minute, and in a jungle of consumer loans and credit cards it can quickly become difficult to navigate and find out what is right for you. So-called alternatives to SMS loans are a new phenomenon in the consumer loan market. There are micro-loans, ie small loan amounts. With a credit card loan you will always have money available that you can spend on services and goods, but there is money you borrow.

What pays off for you to take out credit cards or consumer loans as alternatives to SMS loans depends on what situation you are in and what you need the money for. Alternatives to SMS loans are a temporary microloan where you can borrow a maximum of USD 5,000. With a credit card you always have money available but within a certain limit.

These are SMS loans

These are SMS loans

SMS loan is a loan you can get through your mobile phone. All you needed to do was submit a confirmation to a specific number and then shortly afterward you would get the money into your account. The purpose of SMS loans is to make it easy and quick for the consumer to borrow money. SMS loans are temporary loans that are meant to help you when you need money quickly, such as unforeseen expenses. These SMS loans are offered in Sweden, among others. In Norway, it is currently not allowed to enter into loan agreements in this way.

SMS loans are thus a micro-loan. It varies from bank to bank how much you can borrow, but usually it is between USD 5,000 and 10,000. The advantage of micro-loans is that no one demands what the money is to be used for, since it is a small amount it is relatively easy to repay the loan and a micro-loan can, as I said, help if you need fast money.

The disadvantage of microloans is that what you can spend your money on is limited since the sum is low.

These are credit cards

credit cards

A credit card is the opposite of a debit card. With a debit card, you must have money available for you to use it, but with a credit card you will always have money available. In other words, a credit card is a debit card. The advantage of credit cards is that after you get the card you don’t have to reapply the next time you need money. Many credit cards also come with benefits such as travel insurance, discounts and the fact that it is interest-free and fee-free for a specific period.

Confidence when shopping


Credit cards also give you security when shopping abroad and online. You get a good overview and can study transaction costs more closely when you have a better time. Should you be exposed to scams, it is the card company that has to take the blame for it, and not you.

Credit cards are suitable for anyone who has arranged finances and who has good control over when credit card bills must be paid and who also knows that you have enough in private accounts to be able to repay the credit card debt you take when shopping for goods and services on credit.

You may have several credit cards at one time, but it is recommended that you have only one at a time. Most banks offer many different credit cards with several advantages. At DNB, for example, you can get credit cards that are free of annual fees.

What is the difference between credit cards and SMS loans?

The main difference between credit cards and so-called alternatives to SMS loans and microloans is the scope. Most people who have credit cards use it for regular activities, and since credit cards have a higher limit, it can also be used for much more such as shopping and traveling.

A microloan is very limited and the purpose of a microloan is to use it only when you have a need for quick money, such as if the refrigerator needs to be replaced.

Differences in interest rates

Microloans fall under consumer loans and most consumer loans come with a very high-interest rate. With credit cards, you will have a more stable interest rate, an interest-free period and you get away with some extra costs.

Credit cards also have a much better reputation than consumer loans, and in particular, alternatives to SMS loans that are exceptionally expensive in relation to interest rates. The reason for the bad reputation on consumer loans is that over time it has become increasingly easier for more and more Norwegians to take up such consumer loans, and this has resulted in more people ending up in an economically negative spiral.

Not the same requirements

Not the same requirements

Credit cards also place more demands, such as age and annual income, than alternatives to SMS loans. With alternatives to SMS loans, there are almost no requirements and almost anyone can get them, but you will not receive a credit card unless you can prove that you meet the requirements of the lenders. Common to most credit cards is that the age requirement is quite high, usually, you must be over 23 and 25 years.

Credit cards are suitable for anyone who has a good overview and control of their finances, and who knows that they have stable income enough each month to be able to quickly cover up what you buy on credit. Micro-loans are suitable for consumers who need money quickly and on the day, and who know that they can pay down what they borrow.