Consumers are avoiding personal loans and staying with credit cards even though they have higher interest rates because they cannot be bothered with the loan application, a survey says.

A Citibank survey has found consumers prefer to pay for large purchases with their credit card rather than take out a personal loan.

Of the 1000 people surveyed, 33 per cent of respondents said they would choose to pay for an item costing $3000 or more with a credit card.

This compared with just 10 per cent who opted for a personal bank loan.

But those who would pay from their personal savings, represented the largest group - at 38 per cent.

Citibank head of consumer lending Jacqueline Nissen said the two most important factors when people sought credit were the interest rate and ease of the application process.

"More and more customers are choosing to take out a personal loan because of the savings they can make, but people still rely on their credit card because it's quick and convenient," Mrs Nissen said in a statement.

The survey found 20 per cent of respondents said a credit card was cheaper than a personal loan when making a large purchase.

Brand was the least important factor when selecting a personal loan.

Source:-http://news.smh.com.au/business/credit-cards-preferred-to-loans-survey-20080528-2iru.html