A personal loan or a credit card — which is best for use in an emergency?

You know, a "gotcha." An unexpected expense, mishap or large purchase that requires immediate cash. You're cruising along, bravely treading calm financial waters, when suddenly you hear the music from "Jaws" and — bam! Something happens that requires a chunk of money.

The ideal scenario would be having an emergency fund of savings standing by for such financial needs, but if you don't and the unexpected happens, what's best: tapping a credit card for cash or getting a quick personal loan?

A lump sum or cash as you need it?

First question: Is it a lump sum you need, or will this be a temporary but ongoing expense? The best personal loans are easy to apply for, provide quick funding, and offer hundreds — or thousands — of dollars all at once in a tidy lump sum.

Credit cards can also be a fast funding choice, especially with a cash advance, and give borrowers the flexibility to draw only what they need each month.

Personal loans can be a lower-cost option

One advantage of personal loans: Lenders typically charge an interest rate lower than credit cards. So that "gotcha" you're financing may be paid off sooner. Having a financial solution to an unexpected need that doesn't drag your budget down any longer than absolutely necessary is usually the best choice.

You want to avoid solving a problem (the "gotcha") by creating a new problem (long-term debt with a high annual percentage rate).

Credit card perks vs. a known payoff date

Credit cards can be appealing for emergency expenses because of points earned, travel perks gained, and 0% intro APR incentives offered by some issuers.

On the other hand, the best personal loans offer a usually fixed monthly payment with unchanging repayment terms and a known payoff date.

Credit cards often charge a higher interest rate and can build a mountain of debt one small swipe at a time. And you could hit your credit limit and exhaust your available credit before your unexpected expenses are paid.

Pay-as-you-go vs. taking on more debt

If you pay off your credit cards each month and have good credit, using them to cover unexpected expenses is the best of both worlds: You earn the credit card perks and remain credit card debt free.

Personal loans can turn a quick cash need into a debt with a multi-year shelf life.

Locked-in interest rate vs. variable rate

Here's a key difference of a personal loan: a fixed interest rate. You know how much your monthly payment will be, and it will always be the same. And your repayment period is set: You know how long it will take to pay the loan off.

Credit cards generally have higher interest rates than personal loans and variable interest rates that can change. In the past few years, those interest charges have been heading higher and higher.

Yes, we may see credit card interest rates run lower one day — but because they generally start with higher annual percentage rates than personal loans, you're still probably paying more in interest. Especially if you have good credit and a credit score on the higher end of the scale and qualify for excellent loan offers on a personal loan.

Your credit card may charge annual fees, as well.

Secured debt vs. unsecured debt

Both credit cards and personal loans are generally unsecured debts, meaning you don't have to pledge something valuable to back the loan, especially if you have excellent credit.

However, if you have a savings account, certificate of deposit or paid-off car that you would like to use as collateral for your secured personal loan, you'll likely receive an even lower interest rate and more favorable loan terms. But remember, if you default on a secured personal loan, you may lose the property you pledged as collateral.

The right answer for you

When you face an emergency expense, deciding which is best — a credit card or a personal loan — will depend on your creditworthiness and current debt load.

Using a credit card can be a good option if you have available credit, can handle the increase in your monthly payment, and have a competitive interest rate. A good credit history earns you a lower annual percentage rate.

A personal loan can be the right choice if you have a good credit score, shop multiple lenders for lower interest rates, and prefer a lump sum. Look for a bank, credit union, or other lender with low additional fees. Avoid an origination fee if you can. If you opt to use your credit card for unexpected expenses, remember that personal loans are also appropriate for home improvements and debt consolidation.

Some personal loan lenders even cater to borrowers with bad credit.

The bottom line: Avoid borrowing at a high interest rate, lean on your best APR credit card, shop multiple providers for the best deal, and protect your credit profile by managing debt wisely.